Cover IMF Working Papers
Second-Round Effects of Oil Price Shocks — Implications for Europe’s Inflation Outlook
Author:
Chikako Baba
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Mr. Jaewoo Lee
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Series:
IMF Working Papers
Volume/Issue:
Volume 2022: Issue 173
Language:
English
Publication Date:
09 Sep 2022
DOI:
https://doi.org/10.5089/9798400219351.001
ISBN:
9798400219351
ISSN:
1018-5941
Pages:
40
Keywords:
Second-round effects; oil prices; wages; inflation; pass-through; monetary policy; impulse response.; oil price shock; inflation expectation; pass-through effect; oil price inflation; consumer price inflation; Unemployment rate; Nominal effective exchange rate; Europe; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The pass-through effects of oil price shocks on wage and consumer price inflation vary with the states or structural characteristics of an economy. The effects have declined over time in Europe and been higher in emerging European economies than in advanced economies. The pass-through to wages is found to have been higher when the prevailing level of inflation was higher or when the degrees of unionization and centralized bargaining were higher, while lower under a higher credibility of monetary policy. The effects of oil price shocks on core inflation and inflation expectations are consistent with their effects on wages.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2022: Issue 173