Tackling chronic malnutrition effectively, and in particular improving the diet of children in the critical period up to the age of two years, remains a major challenge to the international community. Recent years have seen nutrition policy-makers focus heavily on addressing non-food related causes of malnutrition in developing countries (health status and caring practices), rather than tackling food insecurity. Furthermore, progress made in measuring food insecurity has largely involved measuring access to food energy, rather than aspects of dietary quality.
Whilst there has also been progress in the measurement of children’s diets, few tools have been available to date to examine whether communities are able to secure enough resources to feed their children properly with the quality of diet necessary to ensure healthy growth and development. In the context of growing momentum behind the development of social protection schemes, and in particular those centred around regular cash transfers in low-income countries, an understanding of the minimum cost of a healthy diet could help policy-makers determine how to achieve the best nutritional outcomes for children and families with these programmes.
One of the most studied issues in international economics is the exchange rate pass-through, which is the effect of fluctuations in exchange rates on export/import prices. Since exporters/importers have costs and revenues in different currencies, any exchange rate movement or delay in repricing affects markups directly. Therefore, a proper understanding of this phenomenon requires to focus on the optimal pricing policy of international traders. How firms set prices determine the degree and the dynamics of the exchange rate pass-through.
The degree and timing of exchange rate pass-through is crucial to policy makers. In fact, the optimal exchange rate regime and the transmission channels of international shocks are totally related to how exporters/importers react to exchange rate movements. For instance, the common wisdom that a devaluation boosts the export sector (expenditure switching effect) disappears completely if international traders set prices in their consumers’ currency.
A major topic of empirical macroeconomics is the analysis and measurement of shock response. Typically, aggregate data and a variety of tools, such as the Impulse Response Function (here-inafter, IRF) and other related scalar measures, are used to perform the analysis.
A recent strand of literature has emphasized that this approach can be problematic when the representative agent hypothesis is violated. According to this view, in the dynamic case when the coefficients differ across individuals, persistence estimates based on aggregate data are significatively higher than those derived from disaggregate data.
