Supply Shocks in Philippines Fuel Inflation: Tails of Price Changes Matter
The article examines how changes in prices affect inflation in the Philippines. By studying the distribution of price changes, the authors found that asymmetric adjustments to shocks can impact inflation. Supply shocks, especially in food and oil sectors, play a big role in causing inflation. The study shows that the distribution of price changes is not normal, and the tails of the distribution matter in predicting inflation.