Assessment of the Impact of Hard Commodity Prices Changes on Inflation in European Union Countries

Abstract

This article analyses the impact of the changes in hard commodity prices in the world commodity exchanges on the variation of countries' general price level. In other words, this article aims to determine the impact of hard commodity prices changes on inflation. In this paper, all countries of the European Union (EU) are included in the research, and case analysis is done accordingly. The methodology applied is the following: a study of the recent scientific literature, processing and systemization of statistical data, correlation analysis and Granger causality test. The results of the research show that price changes of selected commodities in world commodity exchanges have no absolute dependence on the variation of the general price level in EU countries in the long period. Natural gas should be distinguished, whose price fluctuations in the commodity exchange market show a positive correlation with 14 EU countries' CPI changes. In addition, the research shows that Lithuania's inflation has been affected by all five selected commodities' prices fluctuations. UK and Romanian inflation relate to four of five selected commodities' prices fluctuations.

Commodity prices, inflation and inflation uncertainty among emerging economies

“…The paper also confirms transition of commodity price to inflation in countries with flexible exchange rate system but not for countries adopting the fixed rate system, attesting to the importance of changes in exchange rate in the discourse. Lapinskaite and Miecinskiene (2019) conclude that there is no significant relationship between world commodity prices and fluctuations in general price levels in European Union (EU) countries in the long run. The study however showed that changes in price of natural gas on the international market correlates positively on consumer price inflation of 14 EU countries.…”

“…Other researchers including Haider et al (2011), Ali and Sassi (2016) and Fazio et al (2018) also focused on the role governance and institutional variables play in inflationary conditions; they identified factors such as corruption control, government effectiveness, political stability and regulatory quality as key elements impacting movement in rate of inflation. Furthermore, there are also studies such as Chen et al (2014), Miecinskiene and Lapinskaite (2014), Sekine and Tsuruga (2018), Tule et al (2019), Lapinskaite and Miecinskiene (2019) and Fasanya and Awodimila (2020) that approach the subject by assessing the influence of commodity prices on rate of inflation in various geographical jurisdictions with varied results. Compared to aforementioned studies, however, this study Inflation uncertainty adopts a different approach in its assessments of factors influencing movements in rate of inflation and inflation uncertainty among economies in the sub-region.…”

Analysis of Public Procurement for Building Contracts

“…Priežastys, lėmusios infliacijos kilimą, yra įtempta situacija darbo rinkoje (kvalifikuotų darbuotojų trūkumas), pasaulinė COVID-19 pandemija ir staigus energinių išteklių kainų augimas. Infliacija sukelia kainų kilimą, jeigu prekių kainos per žemos, o pasiūla ir paklausa nesubalansuota, pinigai neišvengiamai nusėda gyventojų kišenėse, į cirkuliaciją išleidžiamas papildomas pinigų kiekis ir, kaip šio proceso padarinys, atsiranda infliacija (Bartkienė, 1995) (Lapinskaitė & Miečinskienė, 2020). Medžiagų tiekėjų duomenimis, nerūdijantysis plienas 2022 m. vasario mėn.…”

Analysis of the Potential and Volatility of Large Chili and Cayenne Chili After Covid-19 in Yogyakarta City

“…Despite that price becomes one of the important factors for consumers to determine something they will use (Sinolungan, Kimbal, & Kawulur, 2022). As Furlong said in Lapinskaite and Miecinskiene (2019) that non-oil and gas commodity prices can be a leading indicator of inflation because they can respond quickly, especially to increased demand and economic changes due to disasters.…”