A0416
Title: Global Food and Energy Shock and Their Transmission to the Euro Area Economy
Authors: Yiqiao Sun - European Central Bank (Germany) [presenting]
Abstract: The recent dramatic surge in global energy and food prices have caused concerns about their macroeconomic impact in the post-pandemic world, with the euro area hit the hardest given its proximity to the war zone. We use sign restrictions to identify a global demand shock, jointly with three distinct oil-, gas- and food-specific shocks in a strctural VAR. Then, we quantify their adverse impact on the euro area macroeconomic variables such output and inflation using local projections methods. Our results confirm findings in the literature, that are typical for commodity net-importing countries.Policies aimed at making the euro area less import-dependent will mitigate the effects.
