What contributes to consumer price inflation? A novel decomposition framework with an application to Austria
Abstract This paper introduces a novel approach to decomposing consumer price inflation. Expanding upon the established decomposition method for the value-added deflator, our methodology combines the cost structure of the consumption expenditures from the input–output table with quarterly national a...
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| Format: | Article |
| Language: | English |
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SpringerOpen
2025-01-01
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| Series: | Journal of Economic Structures |
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| Online Access: | https://doi.org/10.1186/s40008-024-00342-1 |
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| _version_ | 1832586068398964736 |
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| author | Martin Schneider |
| author_facet | Martin Schneider |
| author_sort | Martin Schneider |
| collection | DOAJ |
| description | Abstract This paper introduces a novel approach to decomposing consumer price inflation. Expanding upon the established decomposition method for the value-added deflator, our methodology combines the cost structure of the consumption expenditures from the input–output table with quarterly national accounts data. This enables a detailed breakdown of HICP inflation, including imports. Applying this method to Austria from Q1 2019 to Q1 2023, we identify energy and non-energy imports as major contributors to inflation in 2022. Profits began contributing to inflation from H2 2022, while wage pressures remained minimal. The results of the analysis show that the decomposition can provide valuable insights for the conduct of monetary policy. |
| format | Article |
| id | doaj-art-7ec0849e362b4eddaf1cde2f0907ee9f |
| institution | Kabale University |
| issn | 2193-2409 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Journal of Economic Structures |
| spelling | doaj-art-7ec0849e362b4eddaf1cde2f0907ee9f2025-01-26T12:15:52ZengSpringerOpenJournal of Economic Structures2193-24092025-01-0114112610.1186/s40008-024-00342-1What contributes to consumer price inflation? A novel decomposition framework with an application to AustriaMartin Schneider0Oesterreichische NationalbankAbstract This paper introduces a novel approach to decomposing consumer price inflation. Expanding upon the established decomposition method for the value-added deflator, our methodology combines the cost structure of the consumption expenditures from the input–output table with quarterly national accounts data. This enables a detailed breakdown of HICP inflation, including imports. Applying this method to Austria from Q1 2019 to Q1 2023, we identify energy and non-energy imports as major contributors to inflation in 2022. Profits began contributing to inflation from H2 2022, while wage pressures remained minimal. The results of the analysis show that the decomposition can provide valuable insights for the conduct of monetary policy.https://doi.org/10.1186/s40008-024-00342-1Consumer price inflationProduction-side decompositionInflation accounting |
| spellingShingle | Martin Schneider What contributes to consumer price inflation? A novel decomposition framework with an application to Austria Journal of Economic Structures Consumer price inflation Production-side decomposition Inflation accounting |
| title | What contributes to consumer price inflation? A novel decomposition framework with an application to Austria |
| title_full | What contributes to consumer price inflation? A novel decomposition framework with an application to Austria |
| title_fullStr | What contributes to consumer price inflation? A novel decomposition framework with an application to Austria |
| title_full_unstemmed | What contributes to consumer price inflation? A novel decomposition framework with an application to Austria |
| title_short | What contributes to consumer price inflation? A novel decomposition framework with an application to Austria |
| title_sort | what contributes to consumer price inflation a novel decomposition framework with an application to austria |
| topic | Consumer price inflation Production-side decomposition Inflation accounting |
| url | https://doi.org/10.1186/s40008-024-00342-1 |
| work_keys_str_mv | AT martinschneider whatcontributestoconsumerpriceinflationanoveldecompositionframeworkwithanapplicationtoaustria |