Inflation in transit: The freight–PPI connection

Nektarios A. Michail and Konstantinos D. Melas

Economics Letters, 2025, vol. 256, issue C

Abstract: We examine the impact of shipping costs on the euro area producer price index, accounting for both commodities that are shipped in bulk via the use of the Baltic Dry Index, and goods that are shipped in containerships via the use of the Containership Time Charter Index. The estimates, using a Vector Error Correction Model, suggest the existence of an economically meaningful impact from shipping freight rates to manufacturer producer prices, with the effect being more pronounced for containership freight rates (approximately 0.1% per 1% increase in freight rates).

Keywords: Producer Price Index (PPI); Freight Rates; Inflation Transmission; Vector Error Correction Model (VECM) (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:256:y:2025:i:c:s0165176525004744

DOI: 10.1016/j.econlet.2025.112637

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