Resumen
Oil price showed sharp fluctuations in recent years which revived the interest in its effect on inflation. In this paper, we discuss the relationship between oil price and inflation in Spain, at national and regional levels, and making the distinction between energy and non-energy inflation. To this end, we fit econometric models to measure the effect of oil price shocks on inflation and to predi ...
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Oil price showed sharp fluctuations in recent years which revived the interest in its effect on inflation. In this paper, we discuss the relationship between oil price and inflation in Spain, at national and regional levels, and making the distinction between energy and non-energy inflation. To this end, we fit econometric models to measure the effect of oil price shocks on inflation and to predict them under different scenarios. Our results show that almost half of the volatility of changes in total inflation is explained by changes in oil price. As could be expected, the energy component of inflation drives this effect. We also find that, under the most likely scenarios, 1-year ahead total inflation will be moderate, with relevant differences across regions. [--]
Materias
Deflation,
Forecasting,
Inflation,
Oil price,
Simulation
Departamento
Universidad Pública de Navarra. Departamento de Economía /
Nafarroako Unibertsitate Publikoa. Ekonomia Saila
Entidades Financiadoras
This research was supported by Instituto Complutense de Analisis Economico (ICAE), as well as Universidad Complutense de Madrid/Banco de Santander through grants PR26/16-20270, 0412155 and a CT17/17-CT18/17 FPI scholarship. César Castro acknowledges financial support from Ministerio de Ciencia, Innovación y Universidades (Project DGCT, No. PGC2018-093542-B-I00). Andrés Barge-Gil acknowledges financial support from Ministerio de Economía y Competitividad (Project ECO2017-82445-R).