Food Price Transmission in South Asia C.P. Chandrasekhar and Jayati Ghosh

The recent increase in global food prices has once again set off alarm signals in developing countries, especially in South Asia, where food inflation has been a major problem for some years now. Evidence from South Asian countries corroborates the fact that domestic factors do play a role in the international transmission; while rising global prices put upward pressure on domestic prices in a much rapid manner, its downward movements are less rapidly or effectively transmitted and often do not have any such impact. In this article the authors examine the issue of the international transmission of food price increases…

The Transmission of Global Food Prices C. P. Chandrasekhar and Jayati Ghosh

Clearly, we are back in another phase of sharply rising global food prices, which is wreaking further devastation on populations in developing countries that have already been ravaged by several years of rising prices and falling employment chances. The food price index of the FAO in December 2010 surpassed its previous peak of June 2008, the month that is still thought of as the extreme peak of the world food crisis. Some of the biggest increases have come in the prices of sugar and edible oils. But even staple prices have shown sharp increases, with the biggest increase in wheat prices, which…

Controlling Commodity Speculation Jayati Ghosh

The financial reform legislation passed by the U.S. Senate can help plug, at least partially, the loopholes that allowed frenzied activity in commodity futures markets and generated severe price volatility in many primary commodities. In fact, given the tremendous influence of the U.S. in shaping financial systems globally, even these relatively limited new regulations, if they actually come into play, could force some positive changes elsewhere as well. Speculation (Download the full text in PDF format)

Are we heading for Another Global Primary Commodity Price Surge? C.P. Chandrasekhar and Jayati Ghosh

Following the unprecedented volatility of global commodity prices in 2007-08, it was widely predicted that the global economic crisis would generate a dampening effect on such prices. But the recent revival of prices especially in some commodities suggests that this perception may be premature. Examining recent trends in global commodity prices and the reasons behind them, the article assesses the prospects for prices in the immediate future. Commodity_Price (Download the full text in PDF format)

Inflation fears and commodity prices Jayati Ghosh

The global recession is still very much with us, despite the recent attempts by media and some policy makers especially in the North to dismiss it as almost over, and to find some indications of the “green shoots” of recovery in almost each item of economic and financial news. But even as the downturn continues to cause trade flows to decline, and jobs to be lost, some analysts are already talking about the fears of a major inflationary spiral once the global economy recovers. Most of those who are raising this concern are those who were opposed to countercyclical economic…

The Commodity Price Roller Coaster Jayati Ghosh

Despite arguments regarding the role of ‘fundamentals’ in generating the recent price rises in oil and in other commodities especially food, the sheer volatility in these prices over the recent past indicates the clear role of speculative forces in commodity markets which have grown stronger in the wake of the financial crisis in the US and have been looking for options to make profit elsewhere. Roller_Coaster (Download the full text in PDF format)

Are We Heading for Global Stagflation? Jayati Ghosh

There is no doubt about it: the US financial structure is crumbling, possibly even collapsing. The collapse of a major Wall Street bank and the enormous bailouts that are being offered to financial institutions in the US by the US Federal Reserve are only symptomatic of the wider crisis created by the unravelling of the real estate boom based on dodgy lending practices. Everyone knows that what has already come out is only the tip of the iceberg. The financial crisis has clearly spread quite dramatically: from “sub-prime” borrowers to “prime” borrowers; from bad mortgage debt to bad credit card…

Oil Prices and the US Dollar C.P. Chandrasekhar and Jayati Ghosh

The depreciation of the US dollar has been closely bound up with the movement of oil prices, as world oil trade is typically denominated in dollars. Yet this relationship may now be under threat as the dollar continues to depreciate and the US economy tips into recession. This article examines how oil prices have changed with different numeraires, and considers the implications for the future of the oil-dollar nexus. Oil_Prices (Download the full text in PDF format)

Awaiting the Oil After-shock

With headlines tracking the ever-rising price of oil, the lack of any major effect of the shock on global growth has become the subject of discussion and speculation. This article examines the factors driving the oil price increase and the likelihood that this increase would persist and affect the level and distribution of global income. Awaiting_Oil (Download the full text in PDF format)

Reeling under the Relief Measures Jayati Ghosh

Already some aspects of the post-tsunami relief measures in some of the worst affected areas like Aceh in Indonesia are adding to the continuing nightmare of local residents. The ability of international elites to turn every situation, no matter how tragic or desperate, to their own advantage, is of course legendary. Nevertheless, it still manages to shock and surprise when man-made or natural disasters quickly become arenas for reaping superprofits for international business, and are used to penetrate markets when they are particularly weakened. The newest name of the game is of course “reconstruction”, that useful all-encompassing term that covers…