The Energy Crisis and Inflation After 2019: Using Time-Series Clustering for Identifying Trends in the European Union

Stelian Stancu (), Andreea Pernici, Alexandru Isaic-Maniu, Constanța-Nicoleta Bodea and Mihai Sabin Muscalu
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Stelian Stancu: Bucharest University of Economic Studies
Andreea Pernici: Bucharest University of Economic Studies
Alexandru Isaic-Maniu: Romanian Academy
Constanța-Nicoleta Bodea: Bucharest University of Economic Studies
Mihai Sabin Muscalu: Romanian Academy

Chapter Chapter 35 in Europe in the New World Economy: Opportunities and Challenges, 2024, pp 575-589 from Springer

Abstract: Abstract The energy crisis has been one of the most impactful events of the last decade, being generated by a multitude of factors such as the pandemic context, the subsequent economic recovery, the Russian aggression in Ukraine, or the general scarcity and dependence on certain energy resources. As a consequence, all energy and adjacent prices have skyrocketed, with an astringent need to understand each one specificity. Thus, in the current paper, we aim to showcase the evolution of energy and electricity prices, as well as the ones for petrol, gas, and solid fuels, using HICP monthly data starting in October 2019 until September 2023. Our regional focus will be set on the European Union, having in mind the importance put by all its institutions on optimizing the energy sector. In terms of methodology, we will use time-series clustering, based on the dynamic time-warping distance, the hierarchical algorithm, and the silhouette coefficients, all computed using R programming language. We will apply the method for each of the five indicators, in an endeavor to illustrate the similarity between different periods, as well as individual patterns. By using this algorithm, we ensure the newness in the approach, contributing to the policy energy field, as well as the related literature. In terms of general conclusions, although the EU energy crisis seems now to be diminished, the future lies in reducing the dependence on certain resources and exploring the potential of green, sustainable energy. In this sense, the proposed future research directions will also imply understanding the volatility of several green technologies’ prices, in comparison to the ones currently presented.

Keywords: Energy crisis; Inflation; Time series; Dynamic time-warping distance; Hierarchical clustering; European Union (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-71329-3_35

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DOI: 10.1007/978-3-031-71329-3_35

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