Food prices impact euro-area inflation symmetrically, study finds minimal asymmetries.
The article examines how changes in commodity prices affect food prices in the euro area and its major countries. The researchers investigated if food prices react differently to increases or decreases in commodity prices. They used two methods to analyze this relationship: a structural model and predictive regressions. The results show that there is very little evidence of asymmetric effects, meaning that food prices tend to respond similarly to both increases and decreases in commodity prices.