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Inflation expectations proprieties during the war: The case of Ukraine

Author

Listed:
  • Szyszko Magdalena

    (WSB Merito University in Poznań, ul. Powstańców Wielkopolskich 5, 61-895, Poznań, Poland)

  • Rutkowska Aleksandra

    (Poznań University of Economics and Business, al. Niepodległości 10, 61-875 Poznań, Poland)

  • Motuzka Olena

    (National Academy of Statistics, Accounting and Audit, Pidhirna St, 1, Kyiv, Ukraine)

Abstract

This study compares consumer and professional inflation expectations in Ukraine before and during the Russian invasion of Ukraine. We apply entropy-based measures to tackle co-movements of expectations and macro variables (inflation, food inflation, exchange rate and production) and dynamic time warping to assess their forward and backward orientation. The pre-war sample spans from May 2019 to February 2022, and the war sample from March 2022 to December 2024. We expected to find differences between pre-war and wartime samples, as war constitutes a political shock with severe economic consequences. The study confirms the change of expectations: more substantial mutual information with past inflation in most cases, better alignment between professionals and consumers, and a change in the distances between expectations and past or future inflation. This is the first empirical study discussing Ukrainian economic agents’ expectations during the full-scale invasion. Its novel aspect also concerns the method applied—standard procedures cannot be used for this sample length.

Suggested Citation

  • Szyszko Magdalena & Rutkowska Aleksandra & Motuzka Olena, 2025. "Inflation expectations proprieties during the war: The case of Ukraine," Economics and Business Review, Sciendo, vol. 11(1), pages 108-132.
    • Handle: RePEc:vrs:ecobur:v:11:y:2025:i:1:p:108-132:n:1003
    DOI: 10.18559/ebr.2025.1.1813
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    References listed on IDEAS

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    1. Christian Grimme & Steffen Henzel & Elisabeth Wieland, 2014. "Inflation uncertainty revisited: a proposal for robust measurement," Empirical Economics, Springer, vol. 47(4), pages 1497-1523, December.
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    More about this item

    Keywords

    inflation expectations; mutual information; dynamic time warping; war;
    All these keywords.

    JEL classification:

    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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