 Fuel price surges and rising inflation expectations in the Euro AreaInternational Economics, 2025, vol. 181, issue C Abstract: This paper investigates the dynamic relationship between fuel price fluctuations and inflation expectations in the Euro Area from 2005 to 2022, employing a Structural Vector Autoregression (SVAR) model to analyze the impact of these price changes on key macroeconomic variables. Focusing on the context of the Russian invasion of Ukraine, this research reveals that fuel price variations significantly influence both short-term and long-term inflation expectations, with the most pronounced effects observed during the initial month of the conflict. However, after March 2022, the impact of fuel price fluctuations on durable and non-durable goods prices diminishes in intensity. These fuel price changes cease to be the primary driver of inflation in the subsequent months, suggesting other factors gain prominence in influencing price levels across the Euro Area. The findings demonstrate that fuel price changes also have economic implications for Eurosystem financial dynamics. Keywords: Fuel prices; Euro Area; Inflation; SVAR; Expectations; Energy crisis; Russia–Ukraine war (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:181:y:2025:i:c:s2110701724000994 DOI: 10.1016/j.inteco.2024.100576 Access Statistics for this article International Economics is currently edited by Valerie Mignon and Marcelo Olarreaga More articles in International Economics from Elsevier |
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