Gasoline prices, gasoline price expectations, and inflation expectations in the United States

Puneet Vatsa, Gabriel Pino and Adam Clements

Energy Economics, 2025, vol. 146, issue C

Abstract: We analyze whether and to what extent gasoline price shocks influenced headline inflation, one-year gasoline price inflation expectations, and one-year inflation expectations in the United States using a partially identified Bayesian structural vector autoregression model. Results show that headline inflation and one-year inflation expectations increased instantaneously in response to gasoline price shocks, with the effects on one-year inflation expectations being considerably more persistent. The effects on one-year gasoline price inflation expectations were noticeably different. Although these expectations increased initially, they declined two months after the shock, with the effects dissipating shortly thereafter. Variance decomposition reveals that gasoline price shocks explained 66.18 %, 12.06 %, and 22.42 % of the variation in headline inflation, one-year gasoline price inflation expectations, and one-year inflation expectations, respectively.

Keywords: Gasoline prices; Gasoline price expectations; Inflation expectations; Bayesian SVAR (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988325003329
Full text for ScienceDirect subscribers only

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: https://EconPapers.repec.org/RePEc:eee:eneeco:v:146:y:2025:i:c:s0140988325003329

DOI: 10.1016/j.eneco.2025.108508

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().