U.S. Federal Reserve Policies can cause Political instability by raising bread prices

This note argues that the monetary policies of the U.S. Federal Reserve impact food prices globally and can - by extension - affect the incidence of food riots and broader social conflict. We additionally claim that these impacts are especially likely in the case of commodities with more price-inelastic demand, staple cereals in particular, but less likely in the case of food commodities with more price-elastic demand, such as meats and oil. Using mediation analysis, we find empirical support for the impact of changes to US dollar supply on food riots from 2000-2011. We also find that this relationship extends to broader measures of social conflict (including protests, riots, strikes, etc.). We conclude with a cautionary note about how to interpret these results.

The online version contains supplementary material available at 10.1007/s12571-022-01300-0.