Food prices traditionally have an impact on inflation around the world. Movements in these prices are coming more from the supply side, then from the demand side. If treated as a supply shock, monetary policy should not react. However, food prices are part of headline inflation that is an official target for most central banks. Serbia conducts Inflation targeting and faces serious challenges with food price volatility. Food price volatility in Serbia hampers inflation forecasting, and may have a negative influence on inflationary expectations and public confidence in (i.e. credibility of) the Central bank, all of crucial importance for success of Inflation targeting. There are several important possible improvements that may decrease volatility of food prices but also limit negative impact of food price volatility on Consumer Price Index (CPI) as a measure of inflation. These improvements are very important for success of Inflation targeting in Serbia.
The global financial crisis that started in the U.S. had an immediate
spillover to the rest of the world financial markets. Next, a decrease in
real economic output throughout the developed world occurred simultaneously
with high bailout costs for the salvaging of banks and other financial
institutions. This vicious combination was at the core of the bank-sovereign
interdependence and the sovereign debt crisis of the eurozone. As early as
2008, the G20 announced a thorough global reform agenda with an aim to tackle
the root causes of the crises and to transform the system of global financial
regulation. Some important reform steps have been made; still, more than six
years on, the job is not finished. Where are we in terms of global financial
reform, and are we close to creating a more secure global financial system
significantly less prone to crisis and bailouts with taxpayers? money?
[Projekat Ministarstva nauke Republike Srbije, br. 179005: Risks of Financial
Institutions and Markets in Serbia - A Microeconomic and Macroeconomic
Approach]
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.