IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v145y2025ics0140988325002798.html
   My bibliography  Save this article

A replication study on “Revisiting the linkages between oil prices and macroeconomy for the euro area: Does energy inflation still matter?”

Author

Listed:
  • Ghosh, Sajal
  • Kanjilal, Kakali

Abstract

This study presents a replication and critical assessment of Jawadi et al. (2023), which explores the relationship between oil prices and the macroeconomy of the Eurozone. A key conclusion of their study is that monetary policy has limited effectiveness in mitigating the effects of energy inflation, leading to a recommendation for additional fiscal measures. Our replication identifies several methodological and empirical inconsistencies that may affect the validity of the reported findings. These include potential violations of theoretical principles, challenges in empirical interpretation, and concerns regarding model specification and estimation. For instance, some lagged dependent variable coefficients exceed one, suggesting possible stationarity issues, as certain non-stationary variables appear to have been treated as stationary. Additionally, residual diagnostics for both linear and nonlinear regression models indicate departures from standard assumptions, such as non-normality, autocorrelation, and heteroscedasticity, which may influence the reliability of the results. While Jawadi et al. (2023) report a minimal impact of monetary policy, our analysis suggests that the European Central Bank (ECB) rate plays a more substantial role in economic growth dynamics, particularly during periods of significant oil price fluctuations. These findings indicate that the role of monetary policy in addressing energy inflation may warrant further consideration.

Suggested Citation

  • Ghosh, Sajal & Kanjilal, Kakali, 2025. "A replication study on “Revisiting the linkages between oil prices and macroeconomy for the euro area: Does energy inflation still matter?”," Energy Economics, Elsevier, vol. 145(C).
  • Handle: RePEc:eee:eneeco:v:145:y:2025:i:c:s0140988325002798
    DOI: 10.1016/j.eneco.2025.108455
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988325002798
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.eneco.2025.108455?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Mishra, Brajesh & Ghosh, Sajal & Kanjilal, Kakali, 2023. "Policies to reduce India's crude oil import dependence amidst clean energy transition," Energy Policy, Elsevier, vol. 183(C).
    2. Benk, Szilard & Gillman, Max, 2023. "Identifying money and inflation expectation shocks to real oil prices," Energy Economics, Elsevier, vol. 126(C).
    3. Padhan, Hemachandra & Kocoglu, Mustafa & Tiwari, Aviral Kumar & Haouas, Ilham, 2024. "Economic activities, dry bulk freight, and economic policy uncertainties as drivers of oil prices: A tail-behaviour time-varying causality perspective," Energy Economics, Elsevier, vol. 138(C).
    4. Cao, Fangzhi & Su, Chi-Wei & Sun, Dian & Qin, Meng & Umar, Muhammad, 2024. "U.S. monetary policy: The pushing hands of crude oil price?," Energy Economics, Elsevier, vol. 134(C).
    5. Yang, Tianle & Dong, Qingyuan & Du, Min & Du, Qunyang, 2023. "Geopolitical risks, oil price shocks and inflation: Evidence from a TVP–SV–VAR approach," Energy Economics, Elsevier, vol. 127(PB).
    6. Ahmed, Rizwan & Chen, Xihui Haviour & Kumpamool, Chamaiporn & Nguyen, Dung T.K., 2023. "Inflation, oil prices, and economic activity in recent crisis: Evidence from the UK," Energy Economics, Elsevier, vol. 126(C).
    7. Sajal Ghosh & Kakali Kanjilal, 2014. "Oil price shocks on Indian economy: evidence from Toda Yamamoto and Markov regime-switching VAR," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 7(1), pages 122-139, March.
    8. Hamilton, James D, 1983. "Oil and the Macroeconomy since World War II," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 228-248, April.
    9. Jawadi, Fredj & Cheffou, Abdoulkarim Idi & Bu, Ruijun, 2023. "Revisiting the linkages between oil prices and macroeconomy for the euro area: Does energy inflation still matter?," Energy Economics, Elsevier, vol. 127(PA).
    10. Adeosun, Opeoluwa Adeniyi & Tabash, Mosab I. & Anagreh, Suhaib, 2022. "Oil price and economic performance: Additional evidence from advanced economies," Resources Policy, Elsevier, vol. 77(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anastasiou, Dimitris & Ftiti, Zied & Louhichi, Waël & Rizos, Anastasios & Stratopoulou, Artemis, 2025. "The influence of oil investors' sentiment on inflation dynamics and uncertainty," Energy Economics, Elsevier, vol. 142(C).
    2. Aharon, David Y. & Azman Aziz, Mukhriz Izraf & Kallir, Ido, 2023. "Oil price shocks and inflation: A cross-national examination in the ASEAN5+3 countries," Resources Policy, Elsevier, vol. 82(C).
    3. Yang, Cai & Zhang, Hongwei & Qin, Yun & Niu, Zibo, 2024. "Partisan conflict, trade policy uncertainty, and the energy market," Research in International Business and Finance, Elsevier, vol. 71(C).
    4. Emrah I. Cevik & Sel Dibooglu & Max Gillman & Szilard Benk, 2025. "Granger predictability of real oil prices by us money and inflation in Markov-switching regimes," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 15(1), pages 29-52, March.
    5. Banna, Hasanul & Alam, Ashraful & Chen, Xihui Haviour & Alam, Ahmed W., 2023. "Energy security and economic stability: The role of inflation and war," Energy Economics, Elsevier, vol. 126(C).
    6. Ali Sekkach & Nabil Boubrahimi, 2022. "Oil price volatility and GDP for oil-importing countries: Case of Morocco [Volatilité des prix du pétrole et PIB des pays importateurs : Cas du Maroc]," Post-Print hal-03748687, HAL.
    7. Jin Shang & Shigeyuki Hamori, 2024. "The response of oil-importing and oil-exporting countries’ macroeconomic aggregates to crude oil price shocks: some international evidence," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 14(4), pages 933-980, December.
    8. Yang, Shaopeng & Fu, Yuxi, 2025. "Interconnectedness among supply chain disruptions, energy crisis, and oil market volatility on economic resilience," Energy Economics, Elsevier, vol. 143(C).
    9. Marwa Elsherif, 2024. "Modelling Inflation Dynamics and Global Oil Price Shocks in OAPEC Countries: TVP-VAR," International Journal of Energy Economics and Policy, Econjournals, vol. 14(3), pages 51-69, May.
    10. Ghosh, Sajal & Kanjilal, Kakali, 2016. "Co-movement of international crude oil price and Indian stock market: Evidences from nonlinear cointegration tests," Energy Economics, Elsevier, vol. 53(C), pages 111-117.
    11. Singhal, Shelly & Ghosh, Sajal, 2016. "Returns and volatility linkages between international crude oil price, metal and other stock indices in India: Evidence from VAR-DCC-GARCH models," Resources Policy, Elsevier, vol. 50(C), pages 276-288.
    12. Maku Olukayode E. & Ogede Jimoh S. & Osisanwo Bukonla G., 2021. "Oil Price and Macroeconomic Fundamentals in African Net Oil-Exporting Countries: Evidence from Toda–Yamamoto and Homogeneous Causality Tests," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 9(1), pages 102-114, September.
    13. Deheri, Abdhut & Ramachandran, M., 2023. "Does Indian economy asymmetrically respond to oil price shocks?," The Journal of Economic Asymmetries, Elsevier, vol. 27(C).
    14. Zhang, Long & Padhan, Hemachandra & Singh, Sanjay Kumar & Gupta, Monika, 2024. "The impact of renewable energy on inflation in G7 economies: Evidence from artificial neural networks and machine learning methods," Energy Economics, Elsevier, vol. 136(C).
    15. Li, Jinchao & Guo, Yuwei, 2025. "A hybrid model based on iTransformer for risk warning of crude oil price fluctuations," Energy, Elsevier, vol. 314(C).
    16. Muhammad Arshad Khan & Muhammad Iftikhar Ul Husnain & Qaisar Abbas & Syed Zulfiqar Ali Shah, 2019. "Asymmetric effects of oil price shocks on Asian economies: a nonlinear analysis," Empirical Economics, Springer, vol. 57(4), pages 1319-1350, October.
    17. Mbassi, Christophe Martial & Samba, Cyrille Michel & Elomo Zogo, Thérèse, 2025. "Does monetary policy fuel energy consumption across the world? Focus on inflation targeting," Energy Economics, Elsevier, vol. 145(C).
    18. Khalid M. Kisswani & Mohammad I. Elian, 2017. "Do Oil Prices Affect Kuwait Sectoral Stock Prices? Non-Linear Cointegration Evidence," Working Papers 1141, Economic Research Forum, revised 09 2003.
    19. Joseph H. Davis & Christopher Hanes & Paul W. Rhode, 2009. "Harvests and Business Cycles in Nineteenth-Century America," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1675-1727.
    20. Antonella Cavallo & Antonio Ribba, 2017. "Measuring the Effects of Oil Price and Euro-area Shocks on CEECs Business Cycles," Department of Economics 0111, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:145:y:2025:i:c:s0140988325002798. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.