Keywords
Regional price linkages
Kerala
Southern India
How to Cite
Abstract
Food inflation remains a critical economic concern, particularly in developing economies where price volatility affects both consumers and producers. This study examines the regional dynamics of food inflation in Kerala in relation to other southern Indian states, namely Tamil Nadu, Karnataka, Andhra Pradesh, and Telangana, using monthly data from 2016 to 2024. Employing Johansen Cointegration test and Granger causality tests, the study uncovered significant long-run co-movement among food inflation rates across these states. The results indicated that Tamil Nadu’s food inflation has a significant short-term influence on Kerala, while Telangana exerts a dominant long-term impact, suggesting structural linkages in food supply chains. The corresponding Impulse Response Analysis reveals that inflation shocks from Kerala, Tamil Nadu, and Telangana generate positive spillover effects on Kerala’s food inflation rates. Moreover, Granger causality tests confirm a unidirectional influence from all other southern states to Kerala, highlighting the predictive power of regional inflation trends. These findings emphasize the need for coordinated food inflation control policies and supply chain improvements to mitigate inflationary pressures in Kerala. The study provides key policy recommendations, including enhanced regional price monitoring, trade facilitation, and inflation forecasting mechanisms, to strengthen food price stability.
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