What Drives Inflation in Times of Weak Economic Recovery? Disentangling the Sources of Recent Inflationary Spike in Slovakia
What Drives Inflation in Times of Weak Economic Recovery? Disentangling the Sources of Recent Inflationary Spike in Slovakia
Author(s): Menbere Workie Tiruneh, David HOJDANSubject(s): National Economy, Supranational / Global Economy, Energy and Environmental Studies, Health and medicine and law, Financial Markets
Published by: SAV - Slovenská akadémia vied - Ekonomický ústav SAV a Prognostický ústav SAV
Keywords: inflation; inflation decomposition; cost-push; demand-pull; energy crisis; input-output analysis;
Summary/Abstract: In contrast to the pre-Covid-19 pandemic and post-Great Recession periods, when a significant part of mainly advanced economies experienced a low-growth, low-inflation macroeconomic landscape, the post-Covid-19 pandemic period has seen a dramatic shift, with notable increases in the inflation rate while economic growth has remained largely sluggish. In this study, we estimate the underlying causes of the recent inflation spikes and quantify the contributions of individual factors such as production costs, imported consumption and corporate profits to consumer price inflation in Slovakia over the period 2021 – 2023. This is done by using the methodology of the adjusted input-output (IO) price model, which was adopted from Dhingra (2023). The results suggest that excessive corporate mark-ups and profits, input prices and imported inflation have played the most profound role in the overall rising trend of consumer price inflation in the recent period.
Journal: Ekonomický časopis
- Issue Year: 72/2024
- Issue No: 03-04
- Page Range: 140-168
- Page Count: 29
- Language: English
