02005cas a2200241 a 4500 AALejournalIMF007113 230101c9999 xx r poo 0 0eng d 5.00 USD 9781455227082 1018-5941 BD-DhAAL BD-DhAAL Walsh, James. Reconsidering the Role of Food Prices in Inflation / James Walsh. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (21 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Food prices are generally excluded from measures of inflation most closely watched by policymakers due either to their transitory nature or their higher volatility. However, in lower income countries, food price inflation is not only more volatile but also on average higher than nonfood inflation. Food inflation is also in many cases more persistent than nonfood inflation, and shocks in many countries are propagated strongly into nonfood inflation. Under these conditions, and particularly given high global commodity price inflation in recent years, a policy focus on measures of core inflation that exclude food prices can misspecify inflation, leading to higher inflationary expectations, a downward bias to forecasts of future inflation and lags in policy responses. In constructing measures of core inflation, policymakers should therefore not assume that excluding food price inflation will provide a clearer picture of underlying inflation trends than headline inflation. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2011/071 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/071/001.2011.issue-071-en.xml IMF e-Library