First, international to domestic food pass-through is incomplete and has changed over time. Incomplete pass-through is most likely due to the presence of significant local production components (including retail and distribution components), subsidies and domestic consumption patterns that are different from the composition of world commodity price indices (IMF, 2011). Moreover, Blomberg and Harris (1995) and Furlong and Ingenito (1996) show that a declining food commodity pass-through in the United States since the mid-1980s was due to a weakened demand for commodities, as the latter gradually shifted toward sectors with low commodity content (such as IT and services). Evidence of a declining passthrough in advanced economies was also provided by IMF (2008a) between the period 1975-1995 and 1995-2008. Hahn (2003) had shown that pass-through remained stable over time in the euro area. No study has investigated this for Emerging Markets Economies (EMEs).

Second, pass-through in EMEs is higher than in advanced economies (IMF, 2011, 2008a and b and Ferrucci et al., 2010, Galesi and Lombardi, 2009). IMF (2011) estimates a pass-through of a 1 percent international food price shock to domestic food prices at around 0.18 for advanced economies and 0.34 for EMEs. Estimates of the size and speed of pass-through reveal a wide variation across EMEs and depended on the sample, period of analysis and the international price measure used in the analysis. On the one hand, Zoli (2009) finds that a 1 percentage point (ppt) shock in international commodity prices leads to an average 0.2 ppt increase in domestic inflation in 18 European emerging economies and IMF (2008c) finds that a 30% increase in world food prices raised annual headline inflation by an average of 1 ppt in 10 Latin American economies. Liu and Tsang (2008) provide evidence of a weak pass-through in China and Jongwanich and Park (2008) show that pass-through did not have a significant role in developing Asia. On MENA, World Bank (2011) provides pass-through estimates, ranging between 20 and 40% (except for Tunisia and Algeria where they is very low). The report also finds that the passthrough is relatively fast, taking about one year to reach full impact, and in some cases much less (3-6 months). Albers and Peeters (2011) find similar evidence for a number of Southern Mediterranean economies. On the other, Loungani and Swagel (2001) showed that both fuel and nonfuel commodity prices to have a significant but modest impact on inflation in developing countries.

Third, there is evidence of a moderate spill-over effect from domestic food prices to core prices, suggesting weak second-round effects of higher commodity prices **_(_** IMF, 2011; Galesi and Lombardi, 2009, Cecchetti and Moessner, 2008, IMF, 2008a and b). Moreover, such pass-through is also higher for EMEs than in advanced economies (IMF, 2008a and 2011). IMF (2008a) shows that one-half of the shock to domestic food prices eventually makes its way through to core inflation in EMEs, whereas in advanced economies, less than one-quarter passes through. This is due to several factors specific to EMEs, including a higher share of food consumption, and a poor track record in controlling inflation which 9