One of the central issues in national macroeconomics is exchange pass-through, which investigates the relation between exchange rate fluctuations and price adjustments. For this purpose we used the Structural Vector Autoregressive model (SVAR) and quarterly data from 1992:1 to 2011:4. The results expressed that the exchange pass-through in to food inflation is incomplete, and for food prices, ERPT elasticity is around 3 percent in the short run and 6 percent in the long-run. The results of variance decomposition showed that a small portion of food price changes are explained by exchange rate and money supply shocks, and between 93 to 98 percent of the price level changes are explained by its own shocks. In addition, since, Low exchange rate pass‐through provides greater freedom for pursuing independent monetary policy especially through inflation targeting regime, using the suitable exchange rate policies could be effective in decreasing inflation particularly food inflation which could causes food crisis.
Pishbahar, E., Ghahremanzadeh, M., & Aref Eshghi, T. (2014). Exchange Pass-Through in to Food Inflation in Iran. Agricultural Economics, 7(4), 1-21.
MLA
Esmaeil Pishbahar; Mohammad Ghahremanzadeh; Taravat Aref Eshghi. "Exchange Pass-Through in to Food Inflation in Iran". Agricultural Economics, 7, 4, 2014, 1-21.
HARVARD
Pishbahar, E., Ghahremanzadeh, M., Aref Eshghi, T. (2014). 'Exchange Pass-Through in to Food Inflation in Iran', Agricultural Economics, 7(4), pp. 1-21.
VANCOUVER
Pishbahar, E., Ghahremanzadeh, M., Aref Eshghi, T. Exchange Pass-Through in to Food Inflation in Iran. Agricultural Economics, 2014; 7(4): 1-21.
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