Effect of Economic Policy Uncertainty and Crude Oil on Food Prices in India: Evidence from Symmetric and Asymmetric Investigation

Abstract

This pragmatic investigation examined the impact of policy uncertainty and crude oil prices on food inflation in India. The findings revealed that there was a long-run relationship between food inflation, economic policy uncertainty, and crude oil prices. On the other hand, the relevant results showed that, in the long run, the crude oil price significantly influenced the current food price in India. At the same time, economic policy uncertainty does not affect food prices in India. Furthermore, unrestricted NARDL demonstrated no long-run or short-run asymmetric effect of economic policy uncertainty and crude oil costs on food prices in India. The examination supported the notion of the cobweb model from the Indian perspective. In terms of policy implications, research results emphasize the need for crude oil price management to control food inflation in India.