RT Journal Article
T1 The deflationary effect of oil prices in the euro area
A1 Castro, Cesar
A1 Jerez Méndez, Miguel
A1 Barge Gil, Andrés
AB The inflationary effect of oil price has been widely examined by academic literature. Nowadays, the main concern in the euro area (E.A.) is its deflationary effect. In this paper we propose a method to evaluate the effect of oil price changes on inflation as well as an indicator of inflation adjusted for the short-term effect of oil prices, which is aimed to assess the risk of deflation in real time. We illustrate the practical applications of these tools by predicting the evolution of inflation in the E.A., conditional to different scenarios of oil price deflation. Our main finding is that no deflationary scenario for oil prices results in a negative inflation rate forecast for December 2016, despite oil price variation accounting for 25% of the variance of changes in inflation.
PB ELSEVIER
SN 0140-9883
YR 2016
FD 2016
LK https://hdl.handle.net/20.500.14352/23617
UL https://hdl.handle.net/20.500.14352/23617
LA eng
NO Ministerio de Economía y Competitividad (MINECO)
DS Docta Complutense
RD 10 abr 2025