Emerging Asia and International Food Inflation
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An empirical model of the pass-through of international to domestic food inflation is proposed. The inflation rates and exchange rates of China and India are found to be significant in explaining imported food inflation in Colombia, 10,000 miles away. Notwithstanding the recent increase in international food inflation, the pass-through was not the reason for food inflation to increase in Colombia in 2007, yet the pass-through and also draughts may blur the real cause of long-term macroeconomic inflation: monetary policy.
The views expressed herein are those of the author and not those of the Banco de la República or its Board of Directors.
