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An Empirical Note on the Inflation Impact of the Price of Imported Crude Oil: The Case of Germany


  • Cebula, Richard
  • Saadatmand, Yassaman
  • Piccone, Yvonne


This study empirically investigates whether the assumption of the monetary authority in pre-2000 Germany that rising prices of imported crude oil would lead to domestic inflation in Germany had validity. In a model where unemployment rate changes, money stock growth, and wage growth are all allowed for, OLS estimation reveals that although the inflation rate in Germany typically is not sensitive to increasing prices on imported crude oil, crude oil price "shocks" of 50 percent or more during any calendar year have in the past led to significant domestic inflation for the German economy.

Suggested Citation

  • Cebula, Richard & Saadatmand, Yassaman & Piccone, Yvonne, 2002. "An Empirical Note on the Inflation Impact of the Price of Imported Crude Oil: The Case of Germany," MPRA Paper 50887, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:50887

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    References listed on IDEAS

    1. Cebula , Richard J., 2000. "A Brief Empirical Note on the Impact of Crude Oil Prices on Domestic Inflation: The Case of the United States, 1965-1999," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 53(4), pages 449-454.
    2. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    3. Cebula, Richard J & Frewer, Michael, 1980. "Oil Imports and Inflation: An Empirical International Analysis of the 'Imported' Inflation Thesis," Kyklos, Wiley Blackwell, vol. 33(4), pages 615-622.
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    More about this item


    inflation; price of imported crude oil; oil price shocks; Germany;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy


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