Energy shocks in the Euro area: disentangling the pass-through from oil and gas prices to inflation

Chiara Casoli, Matteo Manera () and Daniele Valenti

No 329739, FEEM Working Papers from Fondazione Eni Enrico Mattei (FEEM)

Abstract: We develop a Bayesian Structural VAR model to study the relationship between different energy shocks and inflation dynamics in Europe. Specifically, we model the endogenous transmission from shocks identified by the global market of crude oil and the European natural gas market to two target macroeconomic variables, i.e. inflation expectations and realized headline inflation rate. Our results demonstrate that, since the post-pandemic recovery, inflation in the Euro area is mostly driven by energy price shocks and aggregate supply factors. In particular, the high peaks of the Eurozone inflation are mostly associated with natural gas supply shocks.

Keywords: Public Economics; Research Methods/ Statistical Methods; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 34
Date: 2022-12-19
New Economics Papers: this item is included in nep-eec, nep-ene and nep-mon
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Citations: View citations in EconPapers (4)

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https://ageconsearch.umn.edu/record/329739/files/NDL2022-045-Update.pdf (application/pdf)

Related works:
Journal Article: Energy shocks in the Euro area: Disentangling the pass-through from oil and gas prices to inflation (2024)
Working Paper: Energy shocks in the Euro area: disentangling the pass-through from oil and gas prices to inflation (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemwp:329739

DOI: 10.22004/ag.econ.329739

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