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Quantity versus price dynamics: the role of energy and bottlenecks in the Italian industrial sector

Author

Listed:
  • Francesco Corsello

    (Bank of Italy)

  • Marco Flaccadoro

    (Bank of Italy)

  • Stefania Villa

    (Bank of Italy)

Abstract

We assess the impact on the Italian industrial sector of the abrupt increase in energy prices and of shortages in the supply of inputs since the early months of 2021, focusing on production and producer prices and conducting a disaggregated analysis. Producer prices in energy- and non-energy-intensive industries had already exhibited different dynamics at the beginning of 2021. The same pattern characterized industrial production only after the spring of 2022. These developments are consistent with the result of firms' responses to bottlenecks and energy supply shocks, as shown by the Bank of Italy’s Business Outlook Survey of Industrial and Service Firms in the second-half of 2022. The majority of firms, which have been affected by higher energy costs or supply bottlenecks, reported having increased their selling prices. Some firms also reduced profit margins and implemented energy-saving measures. Only a small share of firms reported having reduced or discontinued production.

Suggested Citation

  • Francesco Corsello & Marco Flaccadoro & Stefania Villa, 2023. "Quantity versus price dynamics: the role of energy and bottlenecks in the Italian industrial sector," Questioni di Economia e Finanza (Occasional Papers) 781, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_781_23
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    References listed on IDEAS

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    1. Gianluca Benigno & Julian di Giovanni & Jan J. J. Groen & Adam I. Noble, 2022. "Global Supply Chain Pressure Index: March 2022 Update," Liberty Street Economics 20220303, Federal Reserve Bank of New York.
    2. Julian di Giovanni & Ṣebnem Kalemli-Özcan & Alvaro Silva & Muhammed A. Yildirim, 2022. "Global Supply Chain Pressures, International Trade, and Inflation," NBER Working Papers 30240, National Bureau of Economic Research, Inc.
    3. Matteo Alpino & Luca Citino & Annalisa Frigo, 2023. "The effects of the 2021 energy crisis on medium-sized and large industrial firms: evidence from Italy," Questioni di Economia e Finanza (Occasional Papers) 776, Bank of Italy, Economic Research and International Relations Area.
    4. Gianluca Benigno & Julian di Giovanni & Jan J. J. Groen & Adam I. Noble, 2022. "The GSCPI: A New Barometer of Global Supply Chain Pressures," Staff Reports 1017, Federal Reserve Bank of New York.
    5. Gianluca Benigno & Julian di Giovanni & Jan J. J. Groen & Adam I. Noble, 2022. "A New Barometer of Global Supply Chain Pressures," Liberty Street Economics 20220104, Federal Reserve Bank of New York.
    6. Gianluca Benigno & Julian di Giovanni & Jan J. J. Groen & Adam I. Noble, 2022. "Global Supply Chain Pressure Index: May 2022 Update," Liberty Street Economics 20220518, Federal Reserve Bank of New York.
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    Cited by:

    1. Simone Emiliozzi & Fabrizio Ferriani & Andrea Gazzani, 2025. "The European Energy Crisis and the Consequences for the Global Natural Gas Market," The Energy Journal, , vol. 46(1), pages 119-145, January.
    2. Marco Flaccadoro, 2024. "The recent weakness in the German manufacturing sector," Questioni di Economia e Finanza (Occasional Papers) 902, Bank of Italy, Economic Research and International Relations Area.
    3. Simona Giglioli & Claire Giordano, 2023. "Exploring the recent resilience of Italy's goods exports: Competitiveness, energy intensity and supply bottlenecks," Questioni di Economia e Finanza (Occasional Papers) 785, Bank of Italy, Economic Research and International Relations Area.
    4. Luigi Infante & Francesca Lilla & Michela E. Pasetto, 2025. "Energy price shocks and their effects on the main macroeconomic variables: a Bayesian SVAR analysis," Questioni di Economia e Finanza (Occasional Papers) 926, Bank of Italy, Economic Research and International Relations Area.
    5. Alessandri, Piergiorgio & Gazzani, Andrea, 2025. "Natural gas and the macroeconomy: Not all energy shocks are alike," Journal of Monetary Economics, Elsevier, vol. 151(C).
    6. Marco Fruzzetti & Tiziano Ropele, 2024. "Nowcasting Italian industrial production: the predictive role of lubricant oils," Questioni di Economia e Finanza (Occasional Papers) 866, Bank of Italy, Economic Research and International Relations Area.

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    Keywords

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    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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