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An Assessment of the Inflationary Impact of the European Electricity Market

Strandberg, Fanny and Westerberg, Frida LU (2024) NEKH01 20232
Department of Economics
Abstract
This thesis investigates the inflationary impact of the European Electricity Market on its member countries, including the EU28, Norway, and Switzerland, from 2003 to 2019. The research question particularly focuses on whether this market impacts the level of inflation in its net exporting member countries. Utilising two panel data regression models, we explore the market's impact on the rate of inflation through the primary variables net export, price comparison, and an interaction variable between these two and exchange rate. Our findings reveal a significant influence of these variables on energy price inflation but not a direct impact on overall inflation. This distinction suggests that the primary variables more accurately explain... (More)
This thesis investigates the inflationary impact of the European Electricity Market on its member countries, including the EU28, Norway, and Switzerland, from 2003 to 2019. The research question particularly focuses on whether this market impacts the level of inflation in its net exporting member countries. Utilising two panel data regression models, we explore the market's impact on the rate of inflation through the primary variables net export, price comparison, and an interaction variable between these two and exchange rate. Our findings reveal a significant influence of these variables on energy price inflation but not a direct impact on overall inflation. This distinction suggests that the primary variables more accurately explain changes in energy price inflation than overall inflation. The study underlines the importance of considering both direct and indirect economic impacts when assessing the influence of the European Electricity Market. Such research is essential for understanding the market's role in the energy landscape of European countries and serves as valuable insight into future energy policy decisions. (Less)
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author
Strandberg, Fanny and Westerberg, Frida LU
supervisor
organization
course
NEKH01 20232
year
type
M2 - Bachelor Degree
subject
keywords
European Electricity Market, Inflation, Energy Price Inflation, Net Export
language
English
id
9145355
date added to LUP
2024-04-16 09:24:44
date last changed
2024-04-16 09:24:44
@misc{9145355,
  abstract     = {{This thesis investigates the inflationary impact of the European Electricity Market on its member countries, including the EU28, Norway, and Switzerland, from 2003 to 2019. The research question particularly focuses on whether this market impacts the level of inflation in its net exporting member countries. Utilising two panel data regression models, we explore the market's impact on the rate of inflation through the primary variables net export, price comparison, and an interaction variable between these two and exchange rate. Our findings reveal a significant influence of these variables on energy price inflation but not a direct impact on overall inflation. This distinction suggests that the primary variables more accurately explain changes in energy price inflation than overall inflation. The study underlines the importance of considering both direct and indirect economic impacts when assessing the influence of the European Electricity Market. Such research is essential for understanding the market's role in the energy landscape of European countries and serves as valuable insight into future energy policy decisions.}},
  author       = {{Strandberg, Fanny and Westerberg, Frida}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{An Assessment of the Inflationary Impact of the European Electricity Market}},
  year         = {{2024}},
}