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Energy expenditures and CPI inflation in 2022: Inflation was even higher than we thought

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  • Chowdhury, Aftab
  • Dixon, Huw

Abstract

Following the sudden increase in the energy price in the second quarter of 2022 caused by the Russia-Ukraine war, inelastic demand generated significant changes in household expenditure shares for energy (particularly in electricity, gas, and other fuels and in fuels and lubricants). These produced a significant downward bias in the official CPI inflation rate for energy and in the official CPI inflation rate for all items in the UK. The downward bias was significantly higher in the European Union in 2022, specifically in Belgium, Estonia, Ireland, Greece, Italy, Cyprus, Lithuania, the Netherlands, Romania, and Slovenia.

Suggested Citation

  • Chowdhury, Aftab & Dixon, Huw, 2025. "Energy expenditures and CPI inflation in 2022: Inflation was even higher than we thought," Energy Economics, Elsevier, vol. 145(C).
    • Handle: RePEc:eee:eneeco:v:145:y:2025:i:c:s0140988325003068
    DOI: 10.1016/j.eneco.2025.108482
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    Keywords

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    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D10 - Microeconomics - - Household Behavior - - - General
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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