Is Oil Price Still Driving Inflation?

Renou-Maissant, Patricia

doi:10.5547/01956574.40.6.pren

Cited by 22 publications

(3 citation statements)

References 56 publications

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“…By using energy, oil, metal and food price indices, we find that, amongst all BRIICS minus Brazil, oil and energy have a significant predictive power over inflation expectations in BRIICS. Our findings on oil and energy commodities support the recent literature (Paradiso and Rao, 2012;Millard and Shakir 2013;Oinonen and Paloviita, 2014;Renou-Maissant, 2019), which argues for a pass-through effect of oil price shocks to inflation. Meanwhile, food price index has only significant predictive power over inflation expectations in India and Indonesia.…”

Section: Introductionsupporting

confidence: 88%

Commodity Price and Inflation Dynamics: Evidence From Briics

Rizvi

Sahminan

2021

BEMP

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In this study, we use a commodity augmented Phillips curve to investigate the impact of global commodity prices on domestic inflation in Brazil, Russia, India, Indonesia, China, and South Africa. Oil and energy prices cause inflationary pressures in all countries, except Russia, where they cause deflationary pressures. In Indiaand Indonesia, global food prices are highly significant and positively related to inflation, while in South Africa precious metal prices impact inflation negatively. For policymakers, this study provides insights on the domestic adjustments required for inflation targeting in response to global commodity price volatility.

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Section: Introductionsupporting

confidence: 88%

Commodity Price and Inflation Dynamics: Evidence From Briics

Rizvi

Sahminan

2021

BEMP

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“…This is contrary to the VAR model, which does not solve the asymmetric reaction. The VAR model has been used by Celik and Akgul [50] in the Turkish context and by Skakun [51] and Renou-Maissant [52], who used the augmented Phillips curve. This method allows to test the stability of oil shocks.…”

Section: Methodsmentioning

confidence: 99%

Preventing Oil Shock Inflation: Sustainable Development Mechanisms vs. Islamic Mechanisms

Benhamed

Gassouma

2023

Sustainability

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This paper discusses the effects of both sustainable development and an Islamic system on the transmission of oil shocks into inflation. Sustainable development in this context includes wealth distribution equity, public governance effectiveness and alternative energy creation for the promotion of economic growth. These factors have been revised by Askari and Mirakhor under an Islamic approach using a set of Islamic indices to reflect a social, economic, political and ecological system that is in compliance with the Sharia principles. Using the ARDL model, we tested whether these Islamic mechanisms could have played the role of sustainable development in the fight against the transmission of oil shocks into inflation in MENA countries during the period 2000–2018. The results show that the Islamic system can play the role of sustainable development better than the traditional one, through fostering social equity, fighting against corruption, promoting humanity in employability and facilitating growth of the real economy. These Islamic values slow down the inflationary phenomenon caused by oil shocks.

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“…Firstly, the G20 economies collectively constitute over 80% of the global GDP (Taylan et al, 2022) and are an important indicator of global economic health when considering their inflationary tendencies. Secondly, oil remains a cornerstone of energy consumption across most G20 economies which leads to its price fluctuations as a potent driver of inflationary pressures (Renou, 2019). Finally, the sharp downturns of oil prices in 2008, 2014 accentuate the need for a deeper understanding of the magnitude of causal impacts during these episodes.…”

Section: Introductionmentioning

confidence: 99%

Investigating the Casual Impact of Oil Price Dynamics on Inflation Using Wavelet Analysis on G20 Countries

Khoj,

Saeed

2024

Preprint

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This study examines the nexus between oil prices and inflation in G20 economies, addressing critical gaps by adopting a comparative approach across three pivotal oil price downturns in 2008, 2014, and 2020 (COVID-19). The study utilized monthly time series data from January 2000 to December 2023 and the Bayesian Structural Time Series (BSTS) approach for causal impact analysis. The study found that during the global financial crisis (December 2007 to June 2014), advanced economies like Australia and the UK displayed varying degrees of negative absolute causal impact, aligning with the deflationary impact of falling oil prices. In contrast, emerging economies faced significant negative causal impacts. From June 2014 to January 2020, diverse inflation impacts were observed across G20 economies after a significant oil price decline. Advanced economies like Australia and emerging economies like Brazil experienced negative impacts, while others showed negligible effects. In the subsequent period from January 2020 to December 2023, amid the COVID-19 pandemic and substantial oil price decline, G20 countries exhibited varied inflation outcomes. Positive absolute effects indicated a notable rise in inflation with China standing out with a substantial negative impact. The wavelet coherence analyses also showed an asymmetrical impact of oil prices on inflation. The findings suggest that policymakers should adopt proactive and adaptive policy frameworks, considering the asymmetric responses of G20 economies to oil price dynamics.

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Is Oil Price Still Driving Inflation?

Abstract: In this paper, we empirically investigate the effects of oil price changes on inflation over the period 1991-2016 for eight industrial countries: the United States

Cited by 22 publications

References 56 publications

Commodity Price and Inflation Dynamics: Evidence From Briics

Commodity Price and Inflation Dynamics: Evidence From Briics

Preventing Oil Shock Inflation: Sustainable Development Mechanisms vs. Islamic Mechanisms

Investigating the Casual Impact of Oil Price Dynamics on Inflation Using Wavelet Analysis on G20 Countries

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