Journal of Rural Development
Asymmetric Transmission of Exchange Rates on Food Prices: Focusing on the Comparison before and after COVID-19
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AuthorSeok, Junho
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Publication Date2023.09.30
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Original
This study analyzes the impact of exchange rates on food prices in Korea, comparing the period after COVID-19 when the exchange rate continued to rise and the period before COVID-19 when the exchange rate remained stable. The asymmetry of exchange rates on food prices is also considered using the asymmetric Autoregressive Distributed Lag Model (ARDL). As a result of the analysis, before COVID-19, the long-term balance relationship or asymmetry between the exchange rate and food prices is not significant. On the other hand, after COVID-19, it was found that there was not only a long-term equilibrium relationship between exchange rates and food prices, but also an asymmetry between exchange rates and food prices in the long term. Considering the downward rigidity of food prices, this study could derive policy implications for the need to manage food prices stably through preemptive support for food companies, in the form of supporting the cost of purchasing imported raw materials, until the exchange rate stabilizes during a period when the exchange rate continues to rise.
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