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Decomposing Import Price Inflation in the EU

Skaghammar, Isak LU and Reuterwall, Johannes (2023) DABN01 20231
Department of Economics
Department of Statistics
Abstract
This thesis examines what drives import price inflation in the EU by decomposing it into supply and demand driven inflation. The decomposition is done by using product level import data retrieved from Eurostat. The paper examines the period from 2019-01 to 2023-01 which captures events such as the Covid-19 and the war in Ukraine. To classify the product as demand or supply driven, two methods are used, one static as well as one dynamic. The dynamic model sometimes show equivocal results due to its volatility, though it captures events such as the outbreak of the Covid-19. The static model indicates a negative demand-driven inflation during 2020 which then shifts to being to being the main component of the soaring import price inflation.... (More)
This thesis examines what drives import price inflation in the EU by decomposing it into supply and demand driven inflation. The decomposition is done by using product level import data retrieved from Eurostat. The paper examines the period from 2019-01 to 2023-01 which captures events such as the Covid-19 and the war in Ukraine. To classify the product as demand or supply driven, two methods are used, one static as well as one dynamic. The dynamic model sometimes show equivocal results due to its volatility, though it captures events such as the outbreak of the Covid-19. The static model indicates a negative demand-driven inflation during 2020 which then shifts to being to being the main component of the soaring import price inflation. This thesis is a part of project together with Denmarks Nationalbank which also included a creation of a dashboard, the link can be found in the conclusion. (Less)
Please use this url to cite or link to this publication:
author
Skaghammar, Isak LU and Reuterwall, Johannes
supervisor
organization
course
DABN01 20231
year
type
H1 - Master's Degree (One Year)
subject
keywords
Import price inflation, decomposition, supply and demand
language
English
id
9125298
date added to LUP
2023-11-21 12:54:35
date last changed
2023-11-21 12:54:35
@misc{9125298,
  abstract     = {{This thesis examines what drives import price inflation in the EU by decomposing it into supply and demand driven inflation. The decomposition is done by using product level import data retrieved from Eurostat. The paper examines the period from 2019-01 to 2023-01 which captures events such as the Covid-19 and the war in Ukraine. To classify the product as demand or supply driven, two methods are used, one static as well as one dynamic. The dynamic model sometimes show equivocal results due to its volatility, though it captures events such as the outbreak of the Covid-19. The static model indicates a negative demand-driven inflation during 2020 which then shifts to being to being the main component of the soaring import price inflation. This thesis is a part of project together with Denmarks Nationalbank which also included a creation of a dashboard, the link can be found in the conclusion.}},
  author       = {{Skaghammar, Isak and Reuterwall, Johannes}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Decomposing Import Price Inflation in the EU}},
  year         = {{2023}},
}