Effects of commodity price shocks on inflation: A cross-country analysis

Atsushi Sekine, Takayuki Tsuruga

    Research output: Contribution to journalArticle

    2 Citations (Scopus)

    Abstract

    Large fluctuations in commodity prices since the 2000s are a renewed concern among policymakers about price stability. This paper investigates the effects of commodity price shocks on headline inflation with a cross-country panel. We find that the effects of commodity price shocks on inflation virtually disappear within about one year after the shock. This transitory effect suggests a low risk of a persistent second-round effect on inflation. While the effect on the price level varies across country groups, the transitory effect is fairly robust. We also allow for the possibility that the effect of commodity price shocks may vary, depending on inflation regimes. Even in this case, we observe the transitory effects at least in countries with exchange-rate flexibility.

    Original languageEnglish
    Pages (from-to)1108-1135
    Number of pages28
    JournalOxford Economic Papers
    Volume70
    Issue number4
    DOIs
    Publication statusPublished - 2018 Oct 1

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    Commodity prices
    Inflation
    Cross-country analysis
    Price stability
    Fluctuations
    Price level
    Politicians
    Exchange rates

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Effects of commodity price shocks on inflation : A cross-country analysis. / Sekine, Atsushi; Tsuruga, Takayuki.

    In: Oxford Economic Papers, Vol. 70, No. 4, 01.10.2018, p. 1108-1135.

    Research output: Contribution to journalArticle

    Sekine, Atsushi ; Tsuruga, Takayuki. / Effects of commodity price shocks on inflation : A cross-country analysis. In: Oxford Economic Papers. 2018 ; Vol. 70, No. 4. pp. 1108-1135.
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