A study compares impulse responses to an oil price shock under a baseline scenario and a counterfactual where the central bank enforces zero CPI for the final year of a two-year horizon. Analysis of industrial production, CPI, oil, and cereal prices shows that monetary policy can mitigate inflationary pressures from oil shocks, influencing output and commodity-price dynamics. The research, presented at economic conferences, highlights policy implications for inflation control. Authors Francesca Monti and Leila Van Keirsbilck, affiliated with Université Catholique de Louvain and the Centre for Economic Policy Research, note the European Central Bank holds copyright. The paper is freely available on ECB, SSRN, and RePEc platforms, with reproduction requiring explicit permission.
© European Central Bank, 2025.
Summary derived from the ECB website (https://www.ecb.europa.eu ).
Made by AI. If you spot anything of concern write us at contact@cybach.com. We’ll promptly correct irregularities.