Post-pandemic inflation dynamics in Portugal: an application of the Bernanke-Blanchard model

Nuno Gonçalves

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: This paper applies the Bernanke and Blanchard (2023) model to analyse the drivers of postpandemic inflation in Portugal, comparing the results with those for the euro area. The analysisreveals that transitory supply-side shocks, particularly related to energy and food prices, alongside global supply chain disruptions, were the primary drivers of inflation in Portugal until 2023. Labour market tightness emerged as a significant inflationary factor from 2023, contributing to persistent inflationary pressures through a stronger wage-to-price pass-through than in the euro area. Conditional projections suggest a slow decline in inflation, though remaining above 2% in the short-term, as labour market conditions continue to exert upward pressure on prices. These findings imply that the inflation dynamics in Portugal, while aligned with broader euro area trends, exhibit distinct labour market-driven inflation persistence.

JEL-codes: C5 E24 E31 E37 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-eec and nep-mon
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bportugal.pt/sites/default/files/documents/2024-12/WP202418.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:ptu:wpaper:w202418

Access Statistics for this paper

More papers in Working Papers from Banco de Portugal, Economics and Research Department Contact information at EDIRC.
Bibliographic data for series maintained by DEE-NTD ().