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The impact of oil prices on products groups inflation: is the effect asymmetric?

Author

Listed:
  • Ligia Topan

    (Instituto Complutense de Análisis Económico. Universidad Complutense de Madrid)

  • Miguel Jerez

    (Instituto Complutense de Análisis Económico. Universidad Complutense de Madrid)

  • Sonia Sotoca

    (Instituto Complutense de Análisis Económico. Universidad Complutense de Madrid)

Abstract

In this paper we assess the oil price pass-through into both, the global inflation in Spain and the inflation derived from the non-deterministic prices of the standard European classification of product groups, during the period 2002-2018. To this end we fit a transfer function to inflation in each group, extended to allow for an asymmetry in the transmission of positive/negative oil cost shocks, that is, a “rockets and feathers effect”. Our results show that most often there is a significant asymmetry, which can be explained by the degree of competition in each market.

Suggested Citation

  • Ligia Topan & Miguel Jerez & Sonia Sotoca, 2020. "The impact of oil prices on products groups inflation: is the effect asymmetric?," Documentos de Trabajo del ICAE 2020-01, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    • Handle: RePEc:ucm:doicae:2001
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