EconPapers    
Economics at your fingertips  
 

Here Comes the Change: The Role of Global and Domestic Factors in Post-Pandemic Inflation in Europe

Mahir Binici, Samuele Centorrino, Serhan Cevik and Gyowon Gwon

International Journal of Central Banking, 2024, vol. 20, issue 2, 237-290

Abstract: The world economy is currently grappling with an unprecedented inflation shock, comparable in magnitude to the 1970s, driven by a convergence of extraordinary factors. This surge raised global inflation to 8.1 percent in 2022, from 3.4 percent in 2020 and an average of 2.1 percent during 2010–20. The inflationary wave has posed a momentous challenge to developing nations and advanced economies historically accustomed to low and steady inflation rates. This paper disentangles the confluence of contributing factors to the post-pandemic rise in consumer price inflation, using monthly data and a battery of econometric methodologies covering a panel of 30 European countries over the period 2002–22. We find that while global factors continue to shape inflation dynamics throughout Europe, country-specific factors, including monetary and fiscal policy responses to the crisis, have also gained greater prominence in determining consumer price inflation during the pandemic period. Coupled with increasing persistence in inflation, these structural shifts call for a significant and extended period of monetary tightening and fiscal realignment.

JEL-codes: C13 C32 C33 C53 E31 E32 E37 E58 F62 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.ijcb.org/journal/ijcb24q2a6.pdf (application/pdf)

Related works:
Working Paper: Here Comes the Change: The Role of Global and Domestic Factors in Post-Pandemic Inflation in Europe (2022) Downloads
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:ijc:ijcjou:y:2024:q:2:a:6

Access Statistics for this article

International Journal of Central Banking is currently edited by Loretta J. Mester

More articles in International Journal of Central Banking from International Journal of Central Banking
Bibliographic data for series maintained by Bank for International Settlements (webmaster@bis.org).

 
Page updated 2025-03-31
Handle: RePEc:ijc:ijcjou:y:2024:q:2:a:6