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

Castro, César; Jiménez‐Rodríguez, Rebeca; Poncela, Pilar; Senra, Eva

doi:10.1007/s40888-016-0048-9

Cited by 19 publications

(12 citation statements)

References 46 publications

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“…Similar results were found in other economies also. For instance, (Castro, Jiménez-Rodríguez, Poncela, & Senra, 2017) found that oil price shocks worsen inflation in European economies. Choi et al (2018) also discovered a similar result with an asymmetric effect in different developed and developing economies.…”

Section: Discussionmentioning

confidence: 99%

Measuring the Impact of Oil Prices and Exchange Rate Shocks on Inflation: Evidence from India

Sharma

Rishad

Gupta

2019

EJBE

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The purpose of this study is to examine the long-run and short-run impact of crude oil price and exchange rate shocks on domestic inflation in India within the framework of the Autoregressive Distributed Lag (ARDL) model. The results show that the exchange rate and oil price shocks significantly influence domestic inflation during the study period (April 1994 to February 2018. Further, the breakpoint unit root test revealed the severe impact of the 2008 financial crisis on inflation in India. The findings show that any move to scale down fuel subsidies will escalate cost-push inflation severely, as the country is an energy-dependent economy. So, policymakers shall stabilise the impact of these shocks through suitable monetary policy actions.

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Section: Discussionmentioning

confidence: 99%

Measuring the Impact of Oil Prices and Exchange Rate Shocks on Inflation: Evidence from India

Sharma

Rishad

Gupta

2019

EJBE

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“…Similarly, among the oil exporting nations too the diversity on impact of oil price pass through can be seen. Castro et al (2017) in a study of four major European economies Germany, France, Spain and Italy found diverse pattern across disaggregate economy. Karimili et al (2016) has found oil price shock significantly affecting domestic inflation in Russia, Azerbaijan and Kazakasthan.…”

Section: Review Of Literaturementioning

confidence: 98%

Asymmetric Impact of Oil Price on Inflation: Evidence from Nepal

Karki

Risal

2019

NRB Econ. Rev.

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This paper investigates asymmetric oil price pass through on inflation in Nepal using time series data of 331 months from April 1987 to February 2018. The paper applies Nonlinear Autoregressive Distributed Lag (NARDL) model to estimate long run and short run asymmetric adjustment of refined petroleum products on Consumer Price Index (CPI). Finding shows presence of long run asymmetric adjustment between price of all petroleum products and CPI. However, when the model is controlled for monetary impact and price level of India, only the price of diesel is found to have long run asymmetric pass through into inflation. The long run cointegrating equation shows unit rise in price of diesel is accompanied by small contraction in CPI in long run by -0.048 units. Meanwhile unit fall in price of diesel is shown to have positive long run pass through in CPI by 0.431 units. This apparent anomaly could be attributed to fact that with rise in price of diesel, demand for cheaper adulterant like kerosene increases thus resulting in fall in CPI Similarly, fall in unit price of diesel could have overall increased industrial demand and other resources which in turn led to significant increase in CPI. Meanwhile, study didn’t find any significant asymmetry in short run between CPI and petroleum products. However, in short run a significant impact on the CPI by actual size of increased price of Petrol and Diesel has been found. Hence, in short run, it shows that it is the size of price increase in Petrol and Diesel; not the price itself that has significant effect on the CPI. Since petroleum products in Nepal are not priced by market, these findings can provide guidelines for future oil pricing in reducing the spillover impact on general price level.

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“…Among them, significant impacts from oil price changes are found prices for industries of food (Ibrahim, 2015), agricultural (Zhang, Lohr, Escalante, & Wetzstein, 2010) and transportation (Hansman, 2014). Castro, Jiménez-Rodríguez, Poncela, and Senra (2017) focused the investigation in Euro area (France, Germany, Italy and Spain). The results reveal that oil price changes have a large and direct effect on energy inflation but the impact to total inflation is weak.…”

Section: Literature Reviewmentioning

confidence: 99%

Oil Price Pass-through on Domestic Inflation: Oil Importing Versus Oil Exporting Countries

Sek

Arıç²,

Chu³

2019

J. Rev. Global Econ.

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Previous studies have evident the effects of oil price changes on domestic inflation. However, such effects may vary due to oil dependency factor. This paper extends the examination on two panel groups, namely the oil importing and oil exporting countries. Each group consists of ten countries. Besides, we also compare the relative effects of oil price with other shocks (domestic output, exporter's production cost and real exchange rate) on domestic inflation (consumer price and producer price). Our results capture significant pass-through effect from oil price changes on domestic inflation at producer and consumer levels. However, oil price is not the main determinant to domestic inflation. The oil price pass-through effect differs between oil importing versus oil exporting groups across consumer and producer levels. Higher oil price causes to higher production price inflation but does not lead to higher consumer price inflation in both groups of countries. The oil price effect together with exchange rate, foreign cost production and GDP have significant long-run impact on domestic inflation in both groups of countries. The joint effects are small and not significant in the short-run. Oil dependency and effective monetary policy matter on determining the effect of oil price changes on domestic inflation.

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

Cited by 19 publications

References 46 publications

Measuring the Impact of Oil Prices and Exchange Rate Shocks on Inflation: Evidence from India

Measuring the Impact of Oil Prices and Exchange Rate Shocks on Inflation: Evidence from India

Asymmetric Impact of Oil Price on Inflation: Evidence from Nepal

Oil Price Pass-through on Domestic Inflation: Oil Importing Versus Oil Exporting Countries

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