Is Oil Price Still Driving Inflation?

Patricia Renou-Maissant
Additional contact information
Patricia Renou-Maissant: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique

Post-Print from HAL

Abstract: In this paper, we empirically investigate the effects of oil price changes on inflation over the period 1991-2016 for eight industrial countries: the United States, Canada, Japan, Australia, Germany, France, Italy, and the UK. In doing so, we use an oil-augmented Phillips curve with unobserved components and we consider time-varying coefficients. The results show that even over a period of low and stable inflation, oil prices play a significant role in the dynamics of inflation. In all the countries except Germany, oil pass-through into inflation increased from the early 2000s up until the global financial crisis. In the United States it has nearly doubled in the last fifteen years. These findings suggest that central banks must continue to monitor oil prices closely

Keywords: Energy and the economy; Oil price; Inflation; Phillips curve; Unobserved components models (search for similar items in EconPapers)
Date: 2019-11
Note: View the original document on HAL open archive server: https://hal.science/hal-05021637v1
References: Add references at CitEc
Citations:

Published in Energy Journal, 2019, 40, pp.199 - 220. ⟨10.5547/01956574.40.6.pren⟩

Downloads: (external link)
https://hal.science/hal-05021637v1/document (application/pdf)

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:hal:journl:hal-05021637

DOI: 10.5547/01956574.40.6.pren

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().