Oil price-inflation pass-through in Romania during the inflation targeting regime

Claudiu Albulescu (), Aviral Tiwari and Cornel Oros

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Abstract: In the wake of the inflation-targeting strategy in Romania, we estimate the impact of international oil prices upon the consumer price index (CPI) and core inflation. The inflation target was systematically missed by the monetary authorities who explain this failure by exogenous factors. Using a frequency domain framework, we show that the oil price–inflation pass-through can be observed only for those components of inflation which include volatile prices and only in the medium run. Our results put forward that the constant missing of the target cannot be explained by the oil price–inflation pass-through and the credibility of the strategy is put into question.

Keywords: Oil price–inflation pass-through; frequency domain; Granger causality; inflation targeting strategy; Romania (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (5)

Published in Applied Economics, 2017, 49 (15), pp.1527-1542. ⟨10.1080/00036846.2016.1221041⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01434319

DOI: 10.1080/00036846.2016.1221041

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