Title: Evaluating the dynamic effect of oil and exchange rate on food prices: a fresh insight from OECD countries using panel ARDL estimation

Authors: Maryum Sajid Raja; Orhan Şanli; Aslı Yenipazarli; Laeeq Janjua; Atteeq Razzak

Addresses: Southwest-Jiaotong University, Chengdu, Sichuan, China ' Economic Development and International Economy, Adnan Menderes University, Adyın, Türkiye ' Economic Development and International Economy, Adnan Menderes University, Adyın, Türkiye ' Faculty of Science, WSB University, Tychy, Poland ' Department of Mathematics, University of Karachi, Karachi, Sindh, Pakistan

Abstract: The purpose of this study is to reveal the effect of oil prices and exchange rates on food prices in OECD countries. Food prices are usually determined by the exchange rate of the currency or either oil prices. Therefore, this paper questions the food price-exchange rate-oil prices trilemma by presenting empirical evidence from a panel of 38 OECD countries. ARDL bounds test and Granger causality methods were used for empirical analysis. Results suggest the increase in food prices in sample countries is associated with the exchange rate and energy prices. The exchange rate effect should be considered an important parameter in terms of energy costs and global food inflation. According to Dumitrescu-Hurlin panel causality tests results there is a strong bidirectional causality relationship between food prices and crude oil prices and exchange rates. These results indicate that exchange rates and crude oil prices are important variables that determine food prices.

Keywords: energy; oil prices; food prices; exchange rate; OECD countries.

DOI: 10.1504/IJGEI.2025.143357

International Journal of Global Energy Issues, 2025 Vol.47 No.1/2, pp.173 - 194

Received: 22 Feb 2023
Accepted: 18 Dec 2023
Published online: 16 Dec 2024 *