Is trade and pandemic uncertainty destabilizing food prices in Togo? New evidence from an asymmetric analysis

Abstract

From a global perspective, the COVID-19 epidemic is causing upheaval that is sowing uncertainty in several sectors of the economy, including the food market where the high cost of living is creating deep discomfort. In this study, we explore the asymmetric impact of pandemic uncertainty and global trade policy on food prices in Togo. The study covers a period from January 2000 to May 2021 and uses a non-linear NARDL (non-autoregressive distributive lag) framework and causality tests. The results show that the different types of uncertainty affect food price stability in both the short and long run, but the effect is more pronounced for pandemic uncertainty. However, our results suggest that the Togolese food market is coping with pandemic uncertainty and trade policy, which should lead policy makers and stakeholders to take corrective measures to control losses.