Effects of commodity price shocks on inflation: a cross-country analysis

Atsushi Sekine and Takayuki Tsuruga

Oxford Economic Papers, 2018, vol. 70, issue 4, 1108-1135

Abstract: Large fluctuations in commodity prices since the 2000s are a renewed concern among policymakers about price stability. This paper investigates the effects of commodity price shocks on headline inflation with a cross-country panel. We find that the effects of commodity price shocks on inflation virtually disappear within about one year after the shock. This transitory effect suggests a low risk of a persistent second-round effect on inflation. While the effect on the price level varies across country groups, the transitory effect is fairly robust. We also allow for the possibility that the effect of commodity price shocks may vary, depending on inflation regimes. Even in this case, we observe the transitory effects at least in countries with exchange-rate flexibility.

JEL-codes: E31 E37 Q43 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (21)

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Related works:
Working Paper: Effects of commodity price shocks on inflation: A cross-country analysis (2017)
Working Paper: Effects of Commodity Price Shocks on Inflation: A Cross-Country Analysis (2016)
Working Paper: Effects of Commodity Price Shocks on Inflation: A Cross Country Analysis (2014)
Working Paper: Effects of Commodity Price Shocks on Inflation:A Cross-Country Analysis (2014)
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