The Unassuming Economist

From a paper by Moayad Al Rasasi, and  Hussain Alramadan:

“This paper analyzes the symmetric and asymmetric effects of global food prices on domestic consumer prices in Saudi Arabia based on monthly data ranging from January 1990 to November 2023. The domestic consumer price data for Saudi Arabia were obtained from the International Financial Statistics of the International Monetary Fund, whereas the global food prices were downloaded from the Food and Agriculture Organization of the United Nations. Unlike in previous studies that focused on this topic in Saudi Arabia, this paper accounts for nonlinearity in the analysis. First, on the basis of the linear autoregressive distributed lag model, the empirical results show that increasing global food prices by 1% pushes domestic prices higher by 0.56%. Moreover, with respect to nonlinearity, the estimated results based on the nonlinear autoregressive distributed lag model reveal that the impact of increasing global food prices is greater and more significant than the insignificant effect of falling global food prices. In other words, a rise in global food prices by 1.0% leads to a substantial increase in domestic prices by approximately 0.47%. However, falling global food prices do not substantially impact domestic prices.”