Hungary's inflationary exposures to global price movements

Koppány, Krisztián, Vakhal, Péter and Pusztai, Pál (2023) Hungary's inflationary exposures to global price movements. Society and Economy, 45 (3). pp. 186-207. DOI

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This paper investigates Hungary's inflationary exposures to global price movements using a simple cost-push input-output price model and a database of inflation-to-output price elasticities (Global Inflation-to-Output Price Elasticity Database, GIOPED) developed on the basis of the OECD's Inter-Country Input-Output Tables. Inflation elasticities are decomposed into local, simple, and complex global value chain effects by applying Wang's decomposition scheme (Wang et al. 2017) to price movements and inflation. Our empirical analysis based on GIOPED elasticities shows that Hungary is highly exposed to global value chain price transmissions originating in Germany, Austria, and Russia; and in particular to changes in energy prices. The crude oil and natural gas price boom and the resulting energy crises caused a significant increase in consumer price levels in Hungary; however, this explains only a fraction of current inflation rates.

Item Type:Article
Uncontrolled Keywords:internationalpricetransmission, globalvaluechains(GVCs), inflationexposures, GVCdecompositions, OECDinter-countryinput-outputtables(ICIO, globalinflation-to-outputpriceelasticitydatabase(GIOPED)
JEL classification:C67 - Input-Output Models
E31 - Price Level; Inflation; Deflation
F62 - Economic Impacts of Globalization: Macroeconomic Impacts
Subjects:Economic development
ID Code:8910
Deposited By: Veronika Vitéz
Deposited On:20 Sep 2023 14:47
Last Modified:20 Sep 2023 14:47

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