Food economics in one Argentine Lesson

Vladimir Putin’s war on Ukraine is one reason for a spike in food prices that now threatens some of the world’s most vulnerable populations. But it’s far from the only reason. In Argentina it isn’t even the primary reason for soaring food costs.

Central bankers and politicians the world over want to blame high food prices on the situation in Ukraine. Yet there are two components to the squeeze. The first is the change in relative prices, i.e., wheat becoming more expensive relative to widgets because of a reduction in global supply. The second cause of higher food prices is broad-based inflation throughout an economy.