{
  "title": "Commodity Price Volatility, Cyclical Fluctuations, and Convergence: What is Ahead for Inflation in Emerging Europe?",
  "publication": "IMF Working Papers, March 1, 2009",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/commodity-price-volatility-cyclical-fluctuations-and-convergence-what-is-ahead-for-inflation-22726",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/commodity-price-volatility-cyclical-fluctuations-and-convergence-what-is-ahead-for-inflation-22726",
  "overlayPath": "/en/publications/wp/issues/2016/12/31/commodity-price-volatility-cyclical-fluctuations-and-convergence-what-is-ahead-for-inflation-22726/index.md",
  "summary": "This paper assesses the role of international commodity prices, cyclical fluctuations, and convergence in driving inflation in 18 European emerging economies.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Paper assesses the role of international commodity prices, cyclical fluctuations, and convergence in driving inflation in 18 European emerging economies.\n- Uses country specific VARs and panel estimates to quantify effects on domestic inflation."
    },
    {
      "heading": "Key findings",
      "content": "- International commodity price shocks have a significant impact on domestic inflation.\n- The inflation response to commodity price shocks is asymmetric for positive and negative shocks.\n- Cyclical fluctuations explain a relatively small share of inflation variability.\n- The inflation response is asymmetric during upturns and downturns.\n- Price convergence is estimated to add nearly 3 percentage points to headline inflation for the average country whose price level is about 50 percent relative to the EU-15 average."
    },
    {
      "heading": "Methods and scope",
      "content": "- Econometric approach: country specific VARs and panel estimates.\n- Sample: 18 European emerging economies.\n- Focused variables and subjects: commodity price shocks, Food prices, Fuel prices, Oil prices, headline inflation, inflation inertia, inflation volatility, exchange rate, Price Convergence."
    },
    {
      "heading": "Policy implications (inferred from findings)",
      "content": "- Monitor international commodity price developments closely given their significant and asymmetric effects on domestic inflation.\n- Consider asymmetric policy responses to positive versus negative commodity price shocks.\n- Recognize limited explanatory power of cyclical fluctuations for inflation variability when designing stabilization policies.\n- Account for price-level convergence pressures that can add nearly 3 percentage points to headline inflation for countries with price levels around 50 percent of the EU-15 average.\n\n---\n\n Content in this bundle\n\n- wp0941\n  - wp0941 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp0941 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/commodity-price-volatility-cyclical-fluctuations-and-convergence-what-is-ahead-for-inflation-22726"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/31/commodity-price-volatility-cyclical-fluctuations-and-convergence-what-is-ahead-for-inflation-22726/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/commodity-price-volatility-cyclical-fluctuations-and-convergence-what-is-ahead-for-inflation-22726/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/31/commodity-price-volatility-cyclical-fluctuations-and-convergence-what-is-ahead-for-inflation-22726/bundle-manifest.json)",
    "Authors: Edda Zoli",
    "Published: March 1, 2009",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451871890.001",
    "Paper assesses the role of international commodity prices, cyclical fluctuations, and convergence in driving inflation in 18 European emerging economies.",
    "Uses country specific VARs and panel estimates to quantify effects on domestic inflation.",
    "International commodity price shocks have a significant impact on domestic inflation.",
    "The inflation response to commodity price shocks is asymmetric for positive and negative shocks.",
    "Cyclical fluctuations explain a relatively small share of inflation variability.",
    "The inflation response is asymmetric during upturns and downturns.",
    "Price convergence is estimated to add nearly 3 percentage points to headline inflation for the average country whose price level is about 50 percent relative to the EU-15 average.",
    "Econometric approach: country specific VARs and panel estimates.",
    "Sample: 18 European emerging economies.",
    "Focused variables and subjects: commodity price shocks, Food prices, Fuel prices, Oil prices, headline inflation, inflation inertia, inflation volatility, exchange rate, Price Convergence.",
    "Monitor international commodity price developments closely given their significant and asymmetric effects on domestic inflation.",
    "Consider asymmetric policy responses to positive versus negative commodity price shocks.",
    "Recognize limited explanatory power of cyclical fluctuations for inflation variability when designing stabilization policies.",
    "Account for price-level convergence pressures that can add nearly 3 percentage points to headline inflation for countries with price levels around 50 percent of the EU-15 average.",
    "**_wp0941**"
  ],
  "related": [
    {
      "title": "_wp0941",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2009/_wp0941.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2009/_wp0941.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2009/_wp0941.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/31/commodity-price-volatility-cyclical-fluctuations-and-convergence-what-is-ahead-for-inflation-22726/index.md",
    "json": "/en/publications/wp/issues/2016/12/31/commodity-price-volatility-cyclical-fluctuations-and-convergence-what-is-ahead-for-inflation-22726/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/31/commodity-price-volatility-cyclical-fluctuations-and-convergence-what-is-ahead-for-inflation-22726/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T10:56:22.430Z"
}