Energy price shocks and inflation dynamics in European economies: Evidence from ARDL and nonlinear ARDL models
Year: 2026
Type: article
Abstract: This study investigates the relationship between energy prices and inflation dynamics in European economies using monthly data for the period 2012–2026. The analysis focuses on the impact of Brent crude oil prices and Henry Hub natural gas prices on inflation measured by the Harmonised Index of Consumer Prices (HICP). The empirical framework employs autoregressive distributed lag (ARDL) and nonlinear ARDL models to capture both symmetric and asymmetric effects of energy price shocks. The results indicate that oil price increases exert a significant and persistent impact on inflation, while gas prices show weaker short-run effects. The nonlinear specification reveals asymmetric transmission, with inflation responding more strongly to oil price increases than decreases. The findings highlight the importance of energy market developments for inflation dynamics and provide implications for monetary policy and energy market regulation.
Source: JOURNAL OF INTERNATIONAL STUDIES
Authors: Vytautas Snieska, Valentinas Navickas
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7160322900