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dc.titleFuel-Price Shocks and Inflation in Latin America and the Caribbean
dc.contributor.authorGalindo, Arturo
dc.contributor.authorNuguer, Victoria
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageLatin America
dc.coverageLatin America
dc.date.available2023-03-08T15:04:12
dc.date.issue2023-01-27T00:01:00
dc.description.abstractWe estimate the impact of fuel-commodity price shocks on inflation and inflation expectations for eight Latin American countries in which monetary policy follows inflation-targeting frameworks. We use Bayesian Vector Autoregressive models (BVARs) and data from 2005 and up to 2022 to quantify these impacts. We find that the fuel-price shocks are significant in all cases and the response ranges between 0.01 and 0.04 percentage points of inflation, following a 1 p.p. shock to fuel prices. A variance decomposition exercise shows that more than 50% of the outburst in inflation that these countries experienced in 2021 and 2022 can be attributed to the shock in global fuel prices. These results are robust to changes in the specification that include additional controls, different commodity price measures, different lag structures, and alternative ordering.
dc.format.extent31
dc.identifier.doihttp://dx.doi.org/10.18235/0004724
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Fuel-Price-Shocks-and-Inflation-in-Latin-America-and-the-Caribbean.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectInflation
dc.subjectCommodity Price
dc.subjectOutput Gap
dc.subjectFuel Price
dc.subjectFreight Logistic
dc.subjectInflation Targeting
dc.subjectExternal Shock
dc.subject.jelcodeE31 - Price Level • Inflation • Deflation
dc.subject.jelcodeE52 - Monetary Policy
dc.subject.jelcodeQ43 - Energy and the Macroeconomy
dc.typeTechnical Notes
idb.identifier.pubnumberIDB-TN-02640
idb.operationRG-K1098
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