Do Producer Prices Cause Consumer Prices? Some Empirical Evidence
نویسنده
چکیده
The main purpose of this paper is to examine the relationship between consumer price index (CPI) and producer price index (PPI) in Malaysia. This research considers monthly data of consumer price index and producer price index from January 1986 to April 2007. The Johansen cointegration method suggests that there is long-run equilibrium relationship between these two variables. Both Engle Granger and Toda-Yamamoto causality tests find that there is uni-directional causality running from PPI to CPI.
منابع مشابه
Do Producer Prices Lead Consumer Prices?
From June 1994 to June 1995, producer prices increased rapidly. Excluding food and energy, prices of crude materials and intermediate goods rose at annual rates of 7.2 and 16.7 percent, respectively. At the same time, however, prices of consumer goods and services excluding food and energy increased a more modest 2.9 percent. Many analysts are concerned that recent increases in the prices of cr...
متن کاملThe Commodity–Consumer Price Connection: Fact or Fable?
nterest in commodity prices as indicators of consumer price inflation has ebbed and flowed with the rise and fall in commodity prices themselves. True to form, as commodity prices have surged in the last two years (Chart 1), interest in their predictive power has returned. Inflation hawks point to an outpouring of studies in the late 1980s showing a strong empirical connection between commodity...
متن کاملEstimating Exchange Rate Pass-Through on Producer Prices in Main Sectors of Iranian Economy
Exchange rate changes could impact on prices. Whether exchange rate pass through to prices is complete or incomplete is an interesting question in analyzing impacts of exchange rate policy. An important aspect of exchange rate pass through is in producer price index and in its sub-indices. Our aim is to analyze the effects of exchange rate changes on producer sub-indices. To do that we have use...
متن کاملFive Facts About Prices: A Reevaluation of Menu Cost Models
We establish five facts about prices in the U.S. economy: 1) The median implied duration of consumer prices when sales are excluded at the product level is between 8 and 11 months. The median implied duration of finished goods producer prices is 8.7 months. 2) One-third of regular price changes are price decreases. 3) The frequency of price increases responds strongly to inflation while the fre...
متن کاملPursuing International Competitiveness in Iranian Wheat Policy
After the war with Iraq which ended in 1988, Iran implemented several agricultural support policies based on Five-Year National Development Plans. The main objective of these plans in the agriculture sector was to make the agricultural economy more market-oriented and to encourage sustainable agriculture. This paper investigates the extent to which Iran's government has been able to achieve thi...
متن کامل