Cover IMF Working Papers
Buy Book in Print
Here Comes the Change: The Role of Global and Domestic Factors in Post-Pandemic Inflation in Europe
Author:
Mahir Binici https://isni.org/isni/0000000404811396 International Monetary Fund

Search for other papers by Mahir Binici in
Current site
Google Scholar Close
,
Samuele Centorrino
Search for other papers by Samuele Centorrino in
Current site
Google Scholar Close
,
Mr. Serhan Cevik
Search for other papers by Mr. Serhan Cevik in
Current site
Google Scholar Close
https://orcid.org/0000-0002-2373-2023
, and
Gyowon Gwon
Search for other papers by Gyowon Gwon in
Current site
Google Scholar Close
Series:
IMF Working Papers
Volume/Issue:
Volume 2022: Issue 241
Language:
English
Publication Date:
09 Dec 2022
DOI:
https://doi.org/10.5089/9798400225789.001
ISBN:
9798400225789
ISSN:
1018-5941
Pages:
42
Keywords:
Inflation; output gap; globalization; Phillips curve; dynamic factor model; fixed effect estimator; local projection method; inflation dynamics; consumer price inflation; fiscal policy response; inflation expectation; inflation process; commodity price; core CPI; Commodity prices; COVID-19; Energy prices; Global; Europe
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.
Download PDF (2.2 MB) Download Epub
Global inflation has surged to 7.5 percent in August 2022, from an average of 2.1 percent in the decade preceding the COVID-19 pandemic, threatening to become an entrenched phenomenon. This paper disentangles the confluence of contributing factors to the post-pandemic rise in consumer price inflation, using monthly data and a battery of econometric methodologies covering a panel of 30 European countries over the period 2002-2022. We find that while global factors continue to shape inflation dynamics throughout Europe, country-specific factors, including monetary and fiscal policy responses to the crisis, have also gained greater prominence in determining consumer price inflation during the pandemic period. Coupled with increasing persistence in inflation, these structural shifts call for significant and an extended period of monetary tightening and fiscal realignment.
  • Collapse
  • Expand
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund