The impact of oil prices on products groups inflation: is the effect asymmetric?

Ligia Topan, Miguel Jerez and Sonia Sotoca
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Ligia Topan: Instituto Complutense de Análisis Económico. Universidad Complutense de Madrid
Sonia Sotoca: Instituto Complutense de Análisis Económico. Universidad Complutense de Madrid

No 2020-02, Documentos de Trabajo del ICAE from Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico

Abstract: In this paper we assess the oil price pass-through into both, the global inflation in Spain and the inflation derived from the non-deterministic prices of the standard European classification of product groups, during the period 2002-2018. To this end we fit a transfer function to inflation in each group, extended to allow for an asymmetry in the transmission of positive/negative oil cost shocks, that is, a “rockets and feathers effect”. Our results show that most often there is a significant asymmetry, which can be explained by the degree of competition in each market.

Keywords: Oil price; Products groups inflation; Asymmetric effects; Transfer function. (search for similar items in EconPapers)
Pages: 24 pages
Date: 2020-02
New Economics Papers: this item is included in nep-ene
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Working Paper: The impact of oil prices on products groups inflation: is the effect asymmetric? (2020)
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