Oil price feeds into core inflation more than before Covid – study
Costlier crude results in sevenfold hit to price levels, Fed economists find
Oil prices have a significantly greater effect on core inflation today than they did before the pandemic, according to new research from four economists with the Federal Reserve board.
In their Feds note published on November 9, Andrea De Michelis and colleagues find that before 2020 a 10 percentage point increase in relative oil-price inflation only lifted core inflation by about 0.01 percentage points – a statistically insignificant amount. Since then, the same change in relative oil-price
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