Modelling the Volatility Inducement of Climate Change in Food Prices: The Role of Technological Shocks

Abstract

We used a GARCH-MIDAS framework to demonstrate that, in addition to the food system, temperature anomalies can cause food price volatility. We show that technology shock can act as an effect modifier between food prices and climate change. We infer that initiatives targeted at mitigating climate change from causing excessive volatility in food prices should involve technology in addition to modification of food demand and supply processes.