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Oil price–inflation pass-through in Romania during the inflation targeting regime

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  • Claudiu Tiberiu Albulescu
  • Cornel Oros
  • Aviral Kumar Tiwari

Abstract

In the wake of the inflation-targeting strategy in Romania, we estimate the impact of international oil prices upon the consumer price index (CPI) and core inflation. The inflation target was systematically missed by the monetary authorities who explain this failure by exogenous factors. Using a frequency domain framework, we show that the oil price–inflation pass-through can be observed only for those components of inflation which include volatile prices and only in the medium run. Our results put forward that the constant missing of the target cannot be explained by the oil price–inflation pass-through and the credibility of the strategy is put into question.

Suggested Citation

  • Claudiu Tiberiu Albulescu & Cornel Oros & Aviral Kumar Tiwari, 2017. "Oil price–inflation pass-through in Romania during the inflation targeting regime," Applied Economics, Taylor & Francis Journals, vol. 49(15), pages 1527-1542, March.
    • Handle: RePEc:taf:applec:v:49:y:2017:i:15:p:1527-1542
    DOI: 10.1080/00036846.2016.1221041
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