This study delves into the dynamics of food inflation in India, analysing data from 1982-83 to 2019-20 to understand the effects of real rural wages, minimum support prices (MSP), and trade liberalisation. Utilising the Johansen Cointegration Test, Vector Error Correction Model (VECM), and Chow Test for structural breaks, we uncover the long-term and short-run relationships influencing food prices. Our findings highlight the significant role of policy adjustments and income factors, alongside identifying structural shifts in the inflationary trend. This research offers valuable insights for crafting policies to achieve food price stability while ensuring economic welfare, thus enriching the dialogue on managing food inflation in India.
No takes yet. Share an insight, caveat, or question.
Agamjot Singh (2024) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: