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Energy shocks and inflation: challenges for monetary policy

Author

Listed:
  • Ryan Niladri Banerjee
  • Fiorella De Fiore
  • Marco Jacopo Lombardi
  • Giovanni Lombardo

Abstract

The recent energy shock ranks among the most significant since the 1990s.Structural factors and initial conditions influence how energy shocks propagate into inflation – directly and through second-round effects. The appropriate monetary policy reaction depends on the persistence of the inflationary pressures as well as the magnitude of the growth impact, and it differs across economies. Uncertainty about these effects further complicates the policy challenge.

Suggested Citation

  • Ryan Niladri Banerjee & Fiorella De Fiore & Marco Jacopo Lombardi & Giovanni Lombardo, 2026. "Energy shocks and inflation: challenges for monetary policy," BIS Bulletins 131, Bank for International Settlements.
    • Handle: RePEc:bis:bisblt:131
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    References listed on IDEAS

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    2. Fiorella De Fiore & Marco Jacopo Lombardi & Giacomo Mangiante, 2025. "The asymmetric and heterogeneous pass-through of input prices to firms' expectations and decisions," BIS Working Papers 1305, Bank for International Settlements.
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