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A new look at oil price pass-through into inflation: evidence from disaggregated European data

Author

Listed:
  • César Castro

    () (University of Salamanca)

  • Rebeca Jiménez-Rodríguez

    () (IME, University of Salamanca)

  • Pilar Poncela

    () (European Commission
    Universidad Autónoma de Madrid)

  • Eva Senra

    () (Universidad de Alcalá)

Abstract

Abstract This paper analyzes oil price pass-through into inflation at disaggregate level for the euro area and its four main economies (France, Germany, Italy and Spain). The pattern of responses to oil price changes is quantitatively diverse across economies and across items of disaggregate inflation. Moreover, we suggest an alternative method to the direct calculation of aggregate effects on inflation given that indirect and second-round effects may offset the positive effects found in energy inflation and dissipate the effect on total inflation.

Suggested Citation

  • César Castro & Rebeca Jiménez-Rodríguez & Pilar Poncela & Eva Senra, 2017. "A new look at oil price pass-through into inflation: evidence from disaggregated European data," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(1), pages 55-82, April.
  • Handle: RePEc:spr:epolit:v:34:y:2017:i:1:d:10.1007_s40888-016-0048-9
    DOI: 10.1007/s40888-016-0048-9
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Inflation; Oil prices; Transfer functions; Disaggregation;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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