Details
- Identification
- Discussion Paper 233
- Publication date
- 27 November 2025
- Authors
- Philipp Pfeiffer | Beatrice Pataracchia | Marco Ratto | Jan Teresiński | Directorate-General for Economic and Financial Affairs
Description
This study develops and estimates a large-scale structural macroeconomic model to quantify how energy commodity prices — particularly natural gas and crude oil — affect inflation and output dynamics in the euro area.
Highlights:
- Estimates a two-region macroeconomic model linking global energy markets with euro area inflation and growth.
- Finds that oil and gas price shocks added around 2 percentage points to euro area inflation in 2022 and reduced GDP growth by 1 percentage point.
- Shows that broader energy effects (including electricity) account for over half of the 2021–22 inflation surge.
- Identifies real wages and domestic prices as key for energy-driven inflation persistence.
Information and identifiers
Discussion Paper 233. November 2025. Brussels. PDF. 76pp. Tab. Graph. Bibliogr. Free.
KC-01-25-074-EN-N (online)
ISBN 978-92-68-31846-1 (online)
ISSN 2443-8022 (online)
doi:10.2765/0423817 (online)
JEL classification: C51, E31, F41 Q43
Disclaimer
European Economy Discussion Papers are written by the staff of the European Commission’s Directorate-General for Economic and Financial Affairs, or by experts working in association with them, to inform discussion on economic policy and to stimulate debate. The views expressed in this document are solely those of the author(s) and do not necessarily represent the official views of the European Commission.
