Central European Business Review 2019, 8(5):18-35 | DOI: 10.18267/j.cebr.230


Assessment of the Impact of Hard Commodity Prices Changes on Inflation in European Union Countries

Indrė Lapinskaitė1, Algita Miečinskienė2
1 Vilnius Gediminas Technical University, Lithuania, indre.lapinskaite@vgtu.lt
2 Vilnius Gediminas Technical University, Lithuania, algita.miecinskiene@vgtu.lt

This article analyses the impact of the changes in hard commodity prices in the world commodity exchanges on the variation of countries’ general price level. In other words, this article aims to determine the impact of hard commodity prices changes on inflation. In this paper, all countries of the European Union (EU) are included in the research, and case analysis is done accordingly. The methodology applied is the following: a study of the recent scientific literature, processing and systemization of statistical data, correlation analysis and Granger causality test. The results of the research show that price changes of selected commodities in world commodity exchanges have no absolute dependence on the variation of the general price level in EU countries in the long period. Natural gas should be distinguished, whose price fluctuations in the commodity exchange market show a positive correlation with 14 EU countries’ CPI changes. In addition, the research shows that Lithuania’s inflation has been affected by all five selected commodities’ prices fluctuations. UK and Romanian inflation relate to four of five selected commodities’ prices fluctuations.

Keywords: general price level, inflation, commodity prices, commodity exchange market, European Union
JEL classification: A10, E3, E31, M21, N50, N54, Q02

Received: October 17, 2019; Revised: December 23, 2019; Accepted: January 2, 2020; Prepublished online: January 19, 2020; Published: January 30, 2020  Show citation

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Lapinskaitė, I., & Miečinskienė, A. (2019).
Assessment of the Impact of Hard Commodity Prices Changes on Inflation in European Union Countries. Central European Business Review, 8(5), 18-35. doi: 10.18267/j.cebr.230
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