The impact of higher energy prices on services and goods consumption in the euro area

Alina Bobasu and Johannes Gareis

Economic Bulletin Boxes, 2023, vol. 8

Abstract: This box examines the impact of the recent increase in energy prices on real consumer spending in the euro area. The empirical framework relies on a structural vector autoregression (SVAR) model and identifies adverse energy supply shocks that lead to a deterioration in the terms of trade, as captured by the ratio between the GDP deflator and the private consumption deflator, and a decline in real consumer spending. It finds that energy supply shocks have significantly weighed on total private consumption in recent quarters, with durable goods consumption being particularly affected. JEL Classification: E31, E21

Keywords: durable goods; energy supply shocks; Private consumption (search for similar items in EconPapers)
Date: 2023-01
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbbox:2023:0008:3

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