This study examines the dynamic linkages between food price inflation and its volatility in the context of Sri Lanka. The empirical evidence derived from the monthly data for the period from 2003M1 to 2017M12 for Sri Lanka. The relationship between inflation rate and inflation volatility has attracted more attention by theoretical and empirical macroeconomists. Empirical studies on the relationship between food inflation and food inflation variability is scarce in the literature. Food price inflation is defined as log difference of food price series. The volatility of a food price inflation is measured by conditional variance generated by the FIGARCH model. Preliminary analysis showed that food inflation is stationary series. Granger causality test reveals that food inflation seems to exert positive impact on inflation variability. We find no evidence for inflation uncertainty affecting food inflation rates. Hence, the findings of the study supports the Friedman-Ball hypothesis in both cases of consumer food price inflation and wholesale food price inflation. This implies that past information on food inflation can help improve the one-step-ahead prediction of food inflation variability but not vice versa. Our results have some important policy implications for the design of monetary policy, food policy thereby promoting macroeconomic stability.

Abstract
1. Introduction
2. Food Inflation in Sri Lanka - at Glance
3. Literature Review
    3.1. Theoretical Background: Inflation andInflation Volatility
    3.2. Empirical Studies
4. Research Methods
    4.1. Data
    4.2. Analytical Tools
    4.3. The Fractional Integrated ConditionalHeteroscedasticity Model
5. Results and Discussions
    5.1. Descriptive Statistics, Correlation Analysisand Unit Root Tests
    5.2. Causality Relationship between Food PriceInflation and Volatility of Food Price Inflation
6. Conclusions and Limitation
Reference

• Abdul Majeed MOHAMED MUSTAFA(Senior Lecturer in Business Economics, Department of Management, Faculty of Management and Commerce, South Eastern University) Corresponding Author
• Selliah SIVARAJASINGHAM(Department of Economics & Statistics, Faculty of Arts, University of Peradeniya)