Economics at your fingertips  

The effect of oil price fluctuations on Spanish inflation

Luis Alvarez, Isabel Sánchez and Alberto Urtasun

Economic Bulletin, 2017, issue JUN, 8 pages

Abstract: This article analyses the impact of changes in oil prices on the consumer price index (CPI) in the Spanish economy from a historical perspective. The evidence provided reveals a substantial degree of pass-through of these changes to CPI components tied to heating and vehicle fuel (direct effect). However, the estimated effect of changes in crude prices on firms’ input costs (indirect effects) and on inflation or wage expectations (second-round effects) is, on average, moderate. Consequently, in the current situation, in the absence of fresh shocks in the expected path of oil prices, the rise in the CPI in early 2017 – linked to base effects prompted by the low price of this commodity for most of 2016 – can be expected to be essentially temporary and, therefore, consistent with a downward trajectory in inflation in the coming months.

Date: 2017
Note: Analytical Articles
References: Add references at CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link) ... /beaa1702-art14e.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

More articles in Economic Bulletin from Banco de España, Economic Bulletin Homepage Contact information at EDIRC.
Bibliographic data for series maintained by María Beiro. Electronic Dissemination of Information Unit. Research Department. Banco de España ().

Page updated 2020-12-15
Handle: RePEc:bde:journl:y:2017:i:6:d:aa:n:14