Oil price pass-through into inflation in Spain at national and regional level

Topan, Ligia and Castro, César and Jerez, Miguel and Barge-Gil, Andrés (2017): Oil price pass-through into inflation in Spain at national and regional level.

Abstract

Oil price showed sharp fluctuations in recent years which have revived the interest on its effect on inflation rates. In this paper we discuss the relationship between oil price and inflation in Spain. We adjust econometric models to predict the effect of oil price shocks on inflation both at national and regional level and under different scenarios. Our results show that almost half of inflation rates are explained by variations in oil price, that one-year ahead inflation will likely be moderate and that important differences across regions exist.

• Item Type: MPRA Paper
• Language: English
• Keywords: inflation; deflation; oil price; forecasting; simulation
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E37 - Forecasting and Simulation: Models and Applications; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy

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