Editorial

Gerhard Fenz, Maria T. Valderrama

As the coronavirus pandemic unfolded in 2020, the world economy entered a deep recession, which forced governments and central banks to implement ­supporting measures and firms and consumers to adapt to the new situation. As the pandemic abated, the economy recovered unexpectedly quickly, not least due to extensive fiscal and monetary support measures around the world. This rebound as well as the shift in spending from services to manufactured goods, and severe disruptions in supply chains led to a strong rise in inflation in all major economies in the course of 2021.

Given the nature of the shocks, global energy and raw material prices rose sharply, which meant that the largest contribution to inflation pressures in the euro area came from “imported” inflation. In such a situation, a tighter monetary policy aimed at reducing inflation by dampening demand is not effective. Furthermore, the uniqueness of the shocks complicated the real-time assessment of the inflation outlook. Given the experience of the years before the pandemic, the ­initial assessment was that in the medium term, once these shocks subside, there was still a risk of inflation being below the 2% target.

Based on this assessment, toward the end of 2021, the Eurosystem decided to start the gradual normalization of monetary policy by removing some policy ­accommodation, thereby gradually moving toward a more neutral stance. The ­Eurosystem’s exit strategy followed a precise sequencing, which had been agreed upon already in September 2019. The first step was stopping net asset purchases, to be followed by increasing policy rates. Thus, the date of “liftoff,” i.e. the first increase of policy rates, not only depended on the inflation outlook but also on the end date of net purchases. In July 2021, the Governing Council announced that interest rates would remain at their current level unless three conditions were met: (1) inflation reaching 2% well ahead of the end of the projection horizon and (2) ­durably for the rest of the projection horizon, as well as (3) progress in underlying inflation being sufficiently advanced to be consistent with inflation stabilizing at 2% over the medium term; also, in accordance with the sequencing of policy ­measures, net asset purchases had to be stopped.

In December 2021, the Eurosystem announced that it would stop purchases under the pandemic emergency purchase programme (PEPP) at end-March 2022, but at the same time announced that monetary policy would remain ­accommodative. In fact, the Eurosystem even increased the pace of purchases under the APP without announcing a date for its end, which meant no guidance on the date of liftoff. Moreover, as the risk of inflation falling below target was considered to remain high, the Governing Council kept its forward guidance on rates, announcing that interest rates would remain at the current level because the conditions for liftoff announced in July 2021 had not been fulfilled yet.

Thus, at the beginning of 2022, the Eurosystem continued to pursue an accommodative monetary policy stance. In February 2022, while economists, government and central banks were still debating the nature and persistence of the rise in inflation as well as the best possible policy responses, the Russian invasion in Ukraine exacerbated inflationary pressures further, particularly through unprecedented rises in energy and commodity prices. This made the situation for the Eurosystem even more challenging, as any monetary policy response to these inflationary pressures would inevitably involve painful tradeoffs between stabilizing growth and ­inflation, while potentially increasing risks to financial stability in an environment of heightened uncertainty.

By the March 2022 meeting of the ECB Governing Council, inflation had ­already reached 7.4%, and it had become increasingly clear that the overshooting of inflation was not temporary and that inflation would not return to levels consistent with price stability within a reasonable period. In the April meeting, the tone in the Governing Council’s communication was notably different: First, it was ­announced that the net purchases under the APP would be discontinued in the third quarter of 2022, which meant, in line with the announced sequencing, that the date of liftoff had moved closer. Second, while interest rates and forward guidance were kept unchanged, the Governing Council introduced the concepts of optionality, gradualism and flexibility to the conduct of monetary policy.

By the fourth Governing Council meeting of the year in June 2022, headline inflation in the euro area had reached 8.6%, and it became obvious that the surge in inflation was not a temporary supply-side shock that would pass without requiring specific monetary policy action. In addition, the economic fallout of the Russian invasion of Ukraine proved to be milder than expected as there were no significant supply-side restraints in the energy sector. Thus, there was also an increasing sense that decisive monetary policy action was necessary to get inflation under control before there was a de-anchoring of inflation expectations. It became evident that if the Eurosystem were to lose its credibility and economic actors expected high ­inflation rates in the medium to long term, this would feed into wage negotiations and lead to a wage-price spiral. Thus, in June the process of policy normalization that had been started in December entered a new phase in which (1) the end of asset purchases was announced for the first day of the third quarter of 2022, (2) forward guidance on interest rates was dropped and (3) the Governing Council switched to a data-based and meeting-by-meeting approach to set interest rates.

Thus, in line with the need to remove monetary policy accommodation, the Governing Council implemented a series of measures toward a more restrictive monetary policy stance. By mid-March, interest rates had been raised by 350 basis points since June 2022, bringing the policy-relevant rate slightly above the upper bound of estimated ranges of a neutral stance. While the Governing Council reiterated its data-based and meeting-by-meeting approach to decision-making and, given recent financial market distress, refrained from giving indications of future rate decisions, it is expected, at the time of writing, that interest rates will keep rising and stay in restrictive territory until the Governing Council sees a credible convergence of inflation toward its 2% medium-term inflation target.

Although the normalization of monetary policy started as early as December 2021, monetary policy remained accommodative for the whole of 2022. It was only in 2023 that monetary policy reached a neutral stance and even became slightly restrictive. Since monetary policy affects the real economy and inflation through varying and lagged transmission channels, it will take some months until we see the effects of the changes in the monetary stance on inflation. According to the most recent forecasts, euro area inflation will average 5.3% in 2023, 2.9% in 2024 and 2.1% in 2025; in Austria, inflation is expected to show a similar downward trend but remain slightly above the euro area average. This means that despite the measures taken by the Eurosystem to control inflation, the effects of the current surge will be with us for some years.

Against the backdrop of these developments and the discussion about the nature of the current inflation shock, its duration and its consequences for consumers, firms and the public sector, the OeNB co-hosted (together with SUERF) a conference titled “The return of inflation” ¹ in May 2022 and at the same time increased its internal analytical efforts to better understand the nature and implications of the unexpected surge in inflation. This special issue of Monetary Policy & the Economy presents the results of these analytical efforts, contributing to a deeper understanding of the drivers of current inflation.

While the focus of this special issue is on the analysis of inflation developments in Austria, we also cover some important aspects at the euro area level. In their contribution “Aggregate price pressures along the supply chain: a euro area perspective,” Teresa Messner and Thomas Zörner take a closer look at how price pressures affect sectoral and aggregate price indices in the euro area and find that sectoral price developments are informative about headline inflation.

The role of the recent surge in energy prices in consumer price developments is analyzed by Martin Schneider (“What is the effect of energy prices on consumer prices in Austria? A production-side decomposition”). Using a production-side ­decomposition based on input-output tables, he finds a significant “inflation backlog,” which signals a considerable time delay in the pass-through of global energy prices to Austrian consumer prices. Changes in the price-setting process are analyzed by Christian Beer, Robert Ferstl, Bernhard Graf and Fabio Rumler (“Grocery price setting in times of high inflation: what webscraped data tell us”). They use data scraped from online shops to analyze the frequency and size of retail price changes ­observed in Austria and find that during the current high-inflation period, time-dependent price setting has been replaced by state-dependent price setting.

Teresa Messner and Fabio Rumler (“Inflation expectations of Austrian households and firms amid high inflation”) use novel and existing survey data on Austrian firms’ and households’ inflation expectations to better understand the formation and the determinants of these expectations, which is crucial for monetary policy. They find, notably, that households have become more rationally attentive in the current high-inflation environment. Also, firms’ expectations of aggregate inflation are somewhat correlated with their own expected selling prices, but firm- or sector-­specific factors and cost-related price developments may shape firms’ price setting more.

Whether the recent surge in inflation has been affecting households differently is analyzed by Pirmin Fessler, Friedrich Fritzer and Mirjam Salish (“Who pays the price when prices rise?”). They employ microdata to estimate household-level inflation rates for a representative sample of households in Austria. Heterogeneity of inflation between households is found to be large compared to changes in aggregate inflation over time.

Alfred Stiglbauer (“Wages, inflation and a negative supply shock”) investigates to what extent wage growth should compensate for inflation. He argues that in case of a negative import-driven supply shock, wages should grow in line with the increase in output prices or core inflation rather than in line with total consumer price ­inflation.

The extraordinarily high inflation has also prompted governments to adopt substantial fiscal policy measures. In “Fighting (the effects of) inflation: government measures in Austria and the EU,” Doris Prammer and Lukas Reiss show that – in ­contrast to other EU member states – Austria has stayed relatively true to the ­approach of relying more on income measures than on mere price measures, ­adopting broad-based transfers and tax cuts to support all households. The distributional impact of these measures is analyzed by Susanne Maidorn and Lukas Reiss (“How effective were fiscal support measure in absorbing the inflation-induced rise in consumption expenditures in 2022?”). They find that overall, fiscal measures in Austria did not fully offset the inflation-induced increase in consumption expenditures for households severely affected by the inflation shock across the income spectrum, including those in the bottom quintile. Finally, Johannes Holler and ­Lukas Reiss (“Quantifying the impact of the 2021–22 inflation shock on Austria’s public finances”) show that while the current inflation shock has a small positive short-run effect on the budget balance in Austria, it is clearly detrimental to public finances in the medium to long run.

Nontechnical summaries

in English and German

Nontechnical summaries in English

Aggregate price pressures along the supply chain: a euro area perspective

Teresa Messner, Thomas O. Zörner

In this article, we take a closer look at how price pressures affect sectoral and aggregate price indices. The ECB uses the Harmonised Index of Consumer Prices (HICP) as a benchmark to assess price stability. Therefore, it is important, from a central bank perspective, to know how price changes on a more granular level affect the aggregate price index, as sectoral price pressures may cause an overall increase of the underlying aggregate price index. In the euro area, both headline inflation, including all HICP components, and core inflation, which excludes volatile components such as food and energy, have increased at an accelerated pace from end 2021.

Our empirical approach enables us to trace the reactions of a set of prices, price aggregates and macro variables to a specific price shock. We simulate a price shock on the granular level and analyze the dynamic reactions of aggregate price variables over time. This exercise allows us to draw valuable conclusions on how sectoral price dynamics may affect the greater picture.

Our results show that price pressures on a sectoral level impact both sectoral and headline inflation. In other words, if in a certain industry, the prices of input materials rise, we will see an increase not only in sectoral prices but also in aggregate headline inflation. Moreover, our findings indicate that the price pass-through increases at later stages of the production process, and it is nearly one-to-one for changes in producer prices. Put differently, firms operating at more advanced stages of the supply chain pass on much of their input price increases to the next stage. Finally, our analysis reveals that upstream and intermediate energy prices have by far the most sizeable direct effect on sectoral variables. In contrast, food prices appear to be stronger determinants of headline inflation. We conclude that it is important to look at a more granular level in order to obtain a good understanding of aggregate price index developments. In general, our results suggest that sectoral price developments can indeed be informative about headline inflation developments, ­confirming results of more complex network models.

What is the effect of energy prices on consumer prices in Austria? A production-side ­decomposition

Martin Schneider

We analyze the role of energy in consumer price developments in Austria on the basis of the cost of inputs needed for producing consumer goods and services using so-called input-output tables. Our results show that in 2018, energy ­accounted for a share of 7.7% in total consumer spending; by November 2022, this share had more than doubled to 17.7%. In 2018, the share of energy was substantial in consumer spending on housing (29%) and transport (26%), while it was very small (1.0%) in spending on other consumer goods. In addition, we estimate the impact of the ­increase in energy wholesale prices between January 2021 and November 2022 on consumer prices. Assuming that the increases in energy prices are fully passed on along the production chain, our calculations show that energy prices ­contributed 14.5 percentage points to headline inflation in the period analyzed; by comparison, the contribution of the energy ­component included in the Harmonised Index of Consumer Prices (HICP) in this period was much smaller
(6.2 percentage points). The difference can be seen as “inflation backlog,” resulting from the fact that consumer prices for electricity, gas and district heating are usually adjusted with some delay to wholesale prices. It is difficult to say at the moment whether and to what extent this backlog will materialize; this will mainly depend on the future path of wholesale prices and the lag with which price changes are reflected in end-user contracts. Finally, the Austrian government has implemented a cap on electricity prices (“Strompreisbremse”), which will reduce inflation by 0.9 percentage points in 2023. In 2024, the abolishment of the cap will increase inflation by 0.3 percentage points.

Grocery price setting in times of high inflation: what webscraped data tell us

Christian Beer, Robert Ferstl, Bernhard Graf, Fabio Rumler

The degree of price rigidity in an economy is a major determinant of the speed and extent of the transmission of ­monetary policy to the real economy. Thus, the analysis of firms’ price-setting behavior at the micro level has become a central field of macroeconomic and monetary research. In this article, we complement the existing literature on price rigidity by calculating statistics on the frequency and size of retail price changes in grocery items using data scraped from online shops of Austrian supermarkets. Hence, our results are based on thousands of online prices observed at a daily frequency from January 2021 to August 2022.

To compare results for the period of relatively low inflation before September 2021 with the ensuing high-inflation period, we split our sample into two parts: January to August 2021 and September 2021 to August 2022. We calculate all our results for the cases including and excluding price changes resulting from temporary sales, promotions and ­discount sales. Depending on the point of view, price changes due to temporary sales, promotions and discount sales could be regarded as an element of price flexibility or as mere short-lived noise that is irrelevant for the propagation of shocks.

Our preliminary findings suggest that prices changed significantly more often in the high-inflation period from ­September 2021 onward than in the low-inflation period before. Differentiating between price increases and decreases, we also find that the rise in the frequency of price adjustment from the first to the second period was relatively stronger for price increases. This pattern is particularly pronounced when sale price changes are excluded. In contrast, the ­average size of price changes remained broadly stable over time. Hence, we conclude that the current surge in grocery price inflation has mainly been driven by an increase in the frequency of price changes, in particular of price increases, rather than by changes in the size of price adjustment. If this finding is confirmed in further studies, it might indicate that in the face of a large shock, the frequency of price changes is no longer constant over time – as found in previous studies – but varies with the state of the economy.

Inflation expectations of Austrian households and firms amid high inflation

Teresa Messner, Fabio Rumler

Inflation expectations are a key indicator of monetary policy as they can be used to predict the future evolution of ­inflation and help central banks assess the credibility of their policies. Furthermore, according to economic theory, inflation expectations determine the perceived and expected real interest rate, thus affecting people’s and firms’ ­consumption and investment decisions. We analyze novel survey data on inflation expectations of Austrian firms from the Business Survey carried out by the Austrian Institute of Economic Research (WIFO-Konjunkturtest) and compare these data with Austrian households’ inflation expectations as measured by the OeNB Barometer Survey to better ­understand the formation and the determinants of firms’ and households’ expectations, especially in the current high-inflation environment. Our results confirm earlier evidence that households’ and firms’ inflation expectations are rather similar, which is not surprising, given that the respondents in the firm survey, in particular those representing smaller firms, have similar characteristics as a typical household. We also find that expectations among firms vary less than expectations among households.

Furthermore, household and firm characteristics that likely influence inflation expectations, e.g. education and age for households and size for firms, indicate, to varying degrees, how informed, rational and experienced respondents are. For firms, we show that certain characteristics of individual sectors, such as the extent to which firms are exposed to energy price fluctuations and supply chain pressures, as well as firm size affect their inflation expectations. For households, on the other hand, we confirm earlier evidence that relatively older and female respondents have higher inflation expectations than younger household members and men.

Another finding is that overall, firms’ inflation expectations are to some extent correlated with their own expected selling prices, but firm- or sector-specific factors and cost-related price developments likely affect firms’ price setting more. While we do find that in general, firms that expect to raise their selling prices also expect higher aggregate ­inflation rates, a large part of firms do not expect to adjust their prices in the near future. The latter could indicate that over the short term, prices tend to remain unchanged (“price rigidity”) or that strong competition hampers the swift adjustment of prices to economic conditions. Lastly, differences between the current and previous survey waves suggest that the current high inflation environment may have raised households’ awareness of inflation, as we see a decrease in households’ subjective uncertainty about inflation expectations.

Who pays the price when prices rise?

Pirmin Fessler, Friedrich Fritzer, Mirjam Salish

Against the backdrop of current high inflation, this study looks into the following three questions: (1) Which households are confronted with the highest inflation rates? (2) Which households are most likely to experience financial difficulty because of high inflation? (3) Which easily observable socioeconomic characteristics convey the most information about inflation exposure since 2020? Our analysis is based on household-level inflation rates for a representative sample of households in Austria which we calculate using microdata from the 2019/2020 Austrian household budget survey and price data from 2020. We show that inflation heterogeneity among households is large compared to the changes in weighted average inflation over time. Whether households live in urban areas or in the country and whether they rent or own their homes – these two factors had a particularly high impact on how much households were affected by inflation in the first half of 2022 because they are closely linked to energy prices. Our results challenge policy­makers’ exclusive focus on the (harmonized) consumer price index (CPI) in times of diverging price developments, given that it is based on a mean consumption bundle. Monitoring a broader range of real household-level consumption bundles allows us to provide a more differentiated assessment of Austrian households’ exposure to inflation. We show that the majority of households in Austria has the financial means to afford the general increase in the price level without having to cut down on spending. The group of households struggling consists of those who are in a difficult financial situation even when inflation is low: unemployed people, low-income earners and single parents. Consequently, policies aimed at mitigating the impact of inflation should rely on measures of financial distress rather than average (harmonized) CPI inflation alone. Furthermore, policymakers could increase households’ resilience to higher and/or volatile energy prices by taking measures to prevent, or even reverse, urban sprawl.

Wages, inflation and a negative supply shock

Alfred Stiglbauer

Wage setters are presently faced with the difficult question of how much wages should rise in response to the sharp increase in inflation that we have seen over the past few months. So far, collectively bargained wages have barely reacted to rising inflation, which has resulted primarily from a surge in (imported) energy and food prices. From empirical observations we know that wage growth usually follows inflation, albeit with a lag; this is also attributable, among other things, to the institutional features of wage bargaining. Current forward-looking indicators of negotiated wages also suggest that wage growth can be expected to accelerate. This raises the question as to what extent wage growth should compensate for inflation. We argue that wage negotiations should not aim for a full compensation of consumer price inflation. The implicit aim of collective bargaining is keeping the wage share in an economy’s income constant; therefore, at the current juncture, rather than rising in line with total consumer price inflation, nominal wages should grow in line with labor productivity as well as the increase of output prices or core inflation.

Fighting (the effects of) inflation: government measures in Austria and the EU

Doris Prammer, Lukas Reiss

The extraordinarily high inflation in the euro area has prompted governments in all EU member states to take substantial discretionary fiscal policy action. In addition, EU-wide emergency interventions to address high energy prices have come into force, including measures to skim off windfall profits from energy producers. While all EU member states have taken far-reaching measures to curb the effects of inflation, these measures are very different in their design. In contrast to other EU member states, Austria has stayed relatively true to the approach of relying more on income-based measures – broad-based transfers and tax cuts, such as the abolition of bracket creep – than on purely price-based ­measures, such as subsidies or tax cuts to reduce the costs of “brown” energy such as fossil fuels. The large scale of the overall package prevented a substantial decline in aggregate real household incomes in Austria in 2022.

When adopting such support measures, governments are not only faced with questions of income distribution, but also have to consider two important policy trade-offs. First, some measures could undermine environmental goals by ­encouraging the inefficient use of energy. Second, measures might curb the effects of inflation for individual households, but at the same time stoke inflation. This is particularly relevant for measures aimed at reducing energy prices, as supply curves for various energy sources are currently steep (i.e. small changes in demand can lead to relatively large price changes). Furthermore, expansive fiscal policy measures in times of high headline and core inflation rates ­counteract central banks’ restrictive policy stance.

How effective were fiscal support measures in absorbing the inflation-induced rise in consumption expenditures in 2022?

Susanne Maidorn, Lukas Reiss

Against the backdrop of the sharp increase in inflation, substantial fiscal measures were implemented in Austria in 2022 to support household incomes. These measures mostly took the form of transfers that benefit all households. Therefore, the analysis of distributional effects performed in this study shows that the overall effect of the support measures was ­similar for all households regardless of their incomes. We also see that lower-income households were more affected by the inflation-induced increase in expenditures, and they also profited more from the support measures. On average, the 20% of households with the lowest incomes saw a very small overcompensation of the increase in their expenditures, whereas for all other households, fiscal support was lower than inflation-induced additional spending.

The amount of support did not depend on how much households were affected by inflation. As a result, we see that ­households with less exposure to inflation (i.e. households with district heating that live in more densely populated areas) benefited more from both the increase in the “climate bonus” and, on average, from one-off payments to transfer ­recipients. At the same time, among the 40% of households with the lowest incomes, those who had been more severely affected by inflation (i.e. households in thinly populated areas that heat their homes with oil, gas or wood) on average received less support. Among households more exposed to inflation, the inflation-induced increase in expenditures was higher than the support received across all income groups.

Quantifying the impact of the 2021–22 inflation shock on Austria’s public finances

Johannes Holler, Lukas Reiss

Higher inflation tends to contribute to higher growth in government revenue, but its overall effect on public finances is ambiguous. To assess the impact of the current inflationary shock on Austria’s budget balance, we take a closer look at its specific nature: it mainly consists in a strong increase in international energy prices and therefore has a negative impact on real GDP. Taking this into account, we show that overall, the effect of the surge in inflation on public ­finances will be clearly negative, although there is also a small positive effect in the short term. That said, this positive effect is much ­smaller than the amount of public funds spent on alleviating the impact of high inflation on households’ incomes and firms. As regards the public debt ratio, the surge in inflation again has a favorable effect in the short run, but given its continuously adverse effects on budget deficits, the impact of inflation is expected to drive up the debt ratio from 2026 onward. ­Furthermore, linking tax brackets and family benefits to inflation, as has recently been introduced in Austria, significantly worsens the response of the budget balance to the current inflationary shock.

Nontechnical summaries in German

Aggregierter Preisdruck entlang der Lieferkette: eine Analyse aus der Perspektive des Euroraums

Teresa Messner, Thomas O. Zörner

Diese Studie untersucht, inwiefern sich der Preisdruck durch Inflation auf sektorale und ­aggregierte Preisindizes ­auswirkt. Da die EZB den Harmonisierten Verbraucherpreisindex (HVPI) bei ihrer Beurteilung der Preisstabilität als Referenzwert heranzieht, ist es aus der Perspektive einer Notenbank wichtig zu wissen, wie sich Preisveränderungen auf granularer Ebene auf den aggregierten Preisindex auswirken; Preisdruck in einem bestimmten Sektor kann nämlich einen Anstieg des zugrunde liegenden aggregierten Preisindex zur Folge haben. Im Euroraum ist seit Ende 2021 sowohl die Gesamtinflation, die alle HVPI-Komponenten enthält, als auch die Kerninflation, die volatilere Komponenten wie Lebensmittel und Energie nicht berücksichtigt, deutlich gestiegen.

Der in dieser Studie verwendete empirische Ansatz erlaubt es, die Reaktion von Preisen und Preisaggregaten auf einen bestimmten Preisschock zu analysieren. Die Simulation eines Preisschocks auf granularer Ebene zeigt dann die dynamischen Reaktionen aggregierter Preis­variablen über einen bestimmten Zeitraum. Dadurch können wichtige Schlussfolgerungen über den Einfluss der Preisdynamik in einzelnen Sektoren auf die gesamte Preisentwicklung abgeleitet werden.

Die Ergebnisse zeigen, dass Preisdruck auf Sektorebene sowohl die Inflation in diesem Sektor als auch die Gesamt­inflation beeinflusst. Bei einem Anstieg der Vorleistungspreise in einer bestimmten Branche steigen daher nicht nur
die Preise in diesem Sektor, sondern es beschleunigt sich auch die aggregierte Gesamtinflation. Des Weiteren deuten die Ergebnisse auf eine höhere Preis­weitergabe auf nachgelagerten Stufen des Produktionsprozesses hin. Erzeugerpreise werden sogar fast vollständig weitergegeben. Das heißt, Firmen in nachgelagerten Stufen der Wertschöpfungskette geben höhere ­Vorleistungspreise stärker an die nächste Stufe weiter. Des Weiteren zeigt die Analyse, dass Energiepreise auf vor­gelagerten und leicht fortgeschrittenen Stufen mit Abstand den größten direkten Einfluss auf sektorale Produzenten­preise haben. Im Gegensatz dazu scheinen Lebensmittelpreise einen größeren Einfluss auf die Gesamt­inflation zu ­haben. Daraus lässt sich ableiten, dass eine granularere Betrachtung dabei helfen kann, ­Entwicklungen des aggregierten Preisindex besser nachvollziehen zu können. Insgesamt lässt sich zusammenfassen, dass Preisentwicklungen in einem ­bestimmten Sektor wichtige Informationen über die Entwicklung der Gesamtinflation liefern, was auch durch ­komplexere Netzwerkmodelle bestätigt wird.

Welchen Effekt haben Energiepreise auf die Verbraucherpreisentwicklung in Österreich? Eine produktionsseitige Analyse

Martin Schneider

In dieser Studie wird analysiert, welche Rolle die Energiepreise für die Entwicklung der ­Verbraucherpreise in Österreich spielen. Grundlage der Analyse bilden die Kosten der für die Produktion von Konsumgütern und Dienstleistungen notwendigen Produktionsfaktoren ­gemäß so genannter Input-Output-Tabellen. Laut unseren Ergebnissen war im Jahr 2018 Energie für 7,7 % der gesamten Konsumausgaben verantwortlich; bis November 2022 hatte sich dieser Anteil mehr als verdoppelt (17,7 %). Energie spielte vor allem bei den Ausgaben für Wohnzwecke (29 %) und Verkehr (26 %) eine große Rolle, sehr klein war der Energieanteil hingegen bei Ausgaben für sonstige Konsumgüter (1,0 %). Darüber hinaus schätzen wir, wie sich der Anstieg der Energiegroßhandelspreise zwischen Jänner 2021 und November 2022 auf die Verbraucherpreise auswirkte. Unter der Annahme, dass die Energiepreise entlang der ­Produktionskette in vollem Umfang weitergegeben werden, errechnet sich für den analysierten Zeitraum ein Beitrag der Energiepreise zur ­Gesamtinflation in Höhe von 14,5 Prozentpunkten; zieht man den Beitrag der Energiekomponente im Harmonisierten Verbraucherpreisindex (HVPI) heran, ergibt sich ein weitaus kleinerer Anteil von 6,2 Prozentpunkten. Die Differenz zwischen diesen beiden Werten kann als „Inflationsrückstau“ interpretiert werden, der daraus resultiert, dass die ­Endverbraucherpreise für Strom, Gas und Fernwärme in der Regel mit einer gewissen Verzögerung an die Groß­handelspreise angepasst werden. Ob und inwieweit diese „aufgestaute“ Inflation tatsächlich zum Tragen kommt, ist im Moment schwer abzuschätzen. Abhängen wird dies in erster Linie von der künftigen Entwicklung der Großhandelspreise und der Verzögerung, mit der Preisänderungen in Endverbraucherverträge übernommen werden. Die von der österreichischen Regierung eingeführte Strompreisbremse wird die Inflation im Jahr 2023 um 0,9 Prozentpunkte senken. Im Jahr darauf wird deren Abschaffung die Inflation wiederum um 0,3 Prozentpunkte anheben.

Lebensmittelpreisentwicklung in Zeiten hoher Inflation: Auswertung von Onlinepreisen

Christian Beer, Robert Ferstl, Bernhard Graf, Fabio Rumler

Das Ausmaß der Preisrigidität in einer Volkswirtschaft ist ein wesentlicher Faktor dafür, wie schnell und wie stark geldpolitische Änderungen in der Realwirtschaft ankommen. Daher hat sich die Analyse des Preissetzungsverhaltens von Unternehmen auch zu einem zentralen Forschungsfeld im Bereich Volkswirtschaft und Geldpolitik entwickelt. Zweck der vorliegenden Studie ist es, die bestehende Literatur zur Häufigkeit und zum Ausmaß von Preisänderungen mithilfe von Lebensmittelpreisen im Onlinegeschäft zu ergänzen, die von den Webseiten öster­reichischer Supermärkte automatisiert heruntergeladen werden können. Die Datenbasis bilden damit tausende von Onlinepreisen, die im Zeitraum Jänner 2021 bis August 2022 ­täglich neu erfasst wurden.

Um das Preissetzungsverhalten im Zeitraum mit relativ betrachtet niedrigeren Inflationswerten vor September 2021 mit dem Preissetzungsverhalten im Zeitraum mit den deutlich höheren Inflationswerten danach vergleichen zu können, erfolgt die Datenauswertung für die zwei Zeiträume getrennt. Zudem werden alle Berechnungen einmal mit und ­einmal ohne Ein­beziehung temporärer Aktions- und Abverkaufspreise durchgeführt. Aktions- und Abverkaufspreise kann man je nach Standpunkt als wichtiges Element von Preisflexibilität sehen oder als nur kurzfristig relevante Aspekte, die mittel- bis langfristig bei der Übertragung von Preisschocks nicht weiter ins Gewicht fallen.

Laut den vorliegenden Ergebnissen wurden die Preise seit Beginn der aktuellen Hochinflations­phase, also seit September 2021, deutlich öfter angepasst als in der Niedriginflationsphase davor. Unterscheidet man zusätzlich zwischen Preiserhöhungen und Preissenkungen, so zeigt sich, dass die Preise in der Hochinflationsphase vergleichsweise öfter hinaufgesetzt als gesenkt wurden. Besonders deutlich zeigt sich dieser Effekt, wenn Aktions- oder Abverkaufspreise unberücksichtigt bleiben. Hingegen hat sich am Ausmaß der Preisanpassungen relativ wenig geändert. Daraus ergibt sich der Umkehrschluss, dass die aktuell hohe Lebensmittelpreisinflation weniger auf vergleichsweise stärkere Preisanpassungen als auf häufigere Preisänderungen (insbesondere Preiserhöhungen) zurückzuführen ist. Sollte sich dieses Ergebnis in weiteren Studien bestätigen, könnte dies darauf hindeuten, dass die Häufigkeit von Preisänderungen angesichts eines ­großen Schocks nicht mehr – wie in früheren Studien festgestellt – im Zeitverlauf konstant ist, sondern von der Wirtschaftslage beeinflusst wird.

Inflationserwartungen österreichischer Privathaushalte und Unter­nehmen in Zeiten hoher Inflation

Teresa Messner, Fabio Rumler

Inflationserwartungen sind wichtige Indikatoren für die Geldpolitik, da sie die zukünftige Entwicklung der Inflation prognostizieren können und somit Zentralbanken dabei helfen, die Glaubwürdigkeit ihrer Politik zu beurteilen. Des Weiteren bestimmen Inflationserwartungen laut Wirtschaftstheorie den wahrgenommenen und erwarteten Realzinssatz und beeinflussen somit den Konsum und die Investitionsentscheidungen von Personen und Unternehmen. Wir analysieren neue Umfragedaten des WIFO-Konjunkturtests zu den Inflationserwartungen österreichischer Unternehmen und vergleichen diese mit Daten zu den Inflationserwartungen österreichischer Privathaushalte aus der OeNB-­Barometer-Umfrage, um ein klareres Bild über die Entstehung und Bestimmungsfaktoren der Erwartungen von Unternehmen und Haushalten – insbesondere während der derzeit hohen Inflation – zu erlangen. Unsere ­Ergebnisse bestätigen frühere Hinweise darauf, dass sich die Inflationserwartungen von Haushalten und Firmen nicht stark voneinander unterscheiden. Das ist insofern nicht überraschend, als in der Unternehmensumfrage insbesondere die Befragten, die kleinere Unternehmen ­vertreten, ähnliche Merkmale wie typische Haushalte aufweisen. Außerdem zeigen unsere ­Ergebnisse, dass sich die Erwartungen der Unternehmen untereinander weniger stark unterscheiden als jene der Haushalte.

Wir stellen ferner fest, dass bestimmte Merkmale von Haushalten (z. B. Alter und Bildungsgrad) und Unternehmen
(z. B. Größe), die Inflationserwartungen beeinflussen dürften, bis zu einem gewissen Grad Aufschluss darüber geben, wie informiert, rational und erfahren die Befragten sind. Bei Unternehmen bestimmen offenbar auch gewisse Charakteristika einzelner Sektoren, etwa in welchem Umfang Unternehmen von schwankenden Energiepreisen oder Lieferkettenproblemen betroffen sind, sowie die Unternehmensgröße die Inflationserwartungen. Bei Haushalten hingegen bestätigen wir frühere Erkenntnisse, dass ältere und weibliche ­Befragte tendenziell höhere Inflationsraten erwarten als jüngere Haushaltsmitglieder und Männer.

Zudem stehen die Inflationserwartungen der Unternehmen bis zu einem gewissen Grad im Einklang mit den erwarteten eigenen Verkaufspreisen; dessen ungeachtet haben unternehmens- bzw. sektorspezifische Faktoren sowie Kosten­entwicklungen vermutlich einen größeren Einfluss auf die Preisgestaltung der Unternehmen. Während jene Unternehmen, die damit rechnen, ihre Verkaufspreise zu erhöhen, auch höhere Inflationsraten erwarten, plant ein Großteil der Unternehmen nicht, seine Preise in naher Zukunft anzupassen. Letzteres könnte darauf hinweisen, dass Preise kurzfristig tendenziell unverändert bleiben („Preisrigidität“), oder dass der Wettbewerb eine rasche Anpassung von Preisen an die wirtschaftliche Lage hemmt. Die ­aktuelle Umfrage zeigt auch, dass die subjektive Unsicherheit bezüglich Inflationserwartungen unter Haushalten seit der vorigen Umfrage abgenommen hat. Dies deutet darauf hin, dass die derzeit hohe Inflation die Teuerung stärker in das Bewusstsein der privaten Haushalte gerückt hat.

Inflation und finanzielle Belastung: eine Analyse von Haushaltsdaten in ­Österreich

Pirmin Fessler, Friedrich Fritzer, Mirjam Salish

Vor dem Hintergrund der aktuell hohen Inflation befasst sich die vorliegende Studie mit ­folgenden drei Fragestellungen: (1) Welche Haushalte sind mit den höchsten Inflationsraten konfrontiert? (2) Welche Haushalte geraten aufgrund der hohen Inflation am ehesten in ­finanzielle Schwierigkeiten? (3) Welche leicht beobachtbaren sozioökonomischen ­Merkmale enthalten die meisten Informationen über das Inflationsrisiko seit 2020? Unsere Analyse ­basiert auf ­Inflationsraten auf Haushaltsebene für eine repräsentative Stichprobe von Privathaushalten in Österreich, die wir mit Hilfe von Mikrodaten der österreichischen Konsumerhebung 2019/2020 und Preisdaten ab 2020 berechnen. Wir ­zeigen, dass die Heterogenität der ­Inflation zwischen den Haushalten im Vergleich zu den Veränderungen der gewichteten Durchschnittsinflation im Zeitverlauf groß ist. Die Größe des Wohnorts und der Umstand, ob Haushalte im Eigenheim oder zur Miete wohnen, hatten im ersten Halbjahr 2022 einen besonders großen Einfluss darauf, wie stark einzelne Haushalte von der Inflation betroffen waren, da beide Faktoren eng mit den Energiepreisen verknüpft sind. Unsere ­Ergebnisse ­stellen den Fokus der politischen Entscheidungsträger:innen auf den (harmonisierten) Verbraucherpreisindex in Zeiten divergierender Preisentwicklungen in Frage, da dieser auf Basis eines durchschnittlichen Konsumbündels ­berechnet wird. Die Abbildung eines breiteren Spektrums an realen Konsumbündeln auf Haushaltsebene ermöglicht hingegen differenzierte Aussagen über die Inflationsbetroffenheit der österreichischen Haushalte. Wir zeigen, dass ein Großteil der österreichischen Haushalte über ausreichend finanzielle Mittel verfügt, um sich den allgemeinen Anstieg des Preisniveaus leisten zu können, ohne den Konsum einschränken zu müssen. Die Gruppe der Haushalte, die Probleme haben, besteht vorwiegend aus jenen Haus­halten, die sich auch in Zeiten niedriger Inflation in einer schwierigeren ­finanziellen Lage ­befinden, nämlich Arbeitslose, Niedrigverdiener:innen und Alleinerziehende. Folglich sollten sich Maßnahmen zur Abfederung oder Eindämmung der Inflation auf Maße der finanziellen Notlage stützen und nicht ­ausschließlich an der durchschnittlichen (H)VPI-Inflation orientieren. Darüber hinaus könnte die Politik die Resilienz der Haushalte gegenüber höheren bzw. volatileren Energiepreise stärken, indem Zersiedelung verhindert oder im ­besten Fall umgekehrt wird.

Löhne, Inflation und ein negativer Angebotsschock

Alfred Stiglbauer

In Lohnverhandlungen sieht man sich aktuell mit der schwierigen Frage konfrontiert, wie stark die Löhne angesichts der in den letzten Monaten sehr hohen Inflation angehoben werden sollen. Bis dato spiegeln die Kollektivvertragslöhne kaum die gestiegene Inflation wider, die primär die Folge des starken Anziehens der Preise für (importierte) Energie und Nahrungsmittel ist. Empirische Beobachtungen belegen, dass das Lohnwachstum in der Regel dem ­Inflationsverlauf folgt, allerdings mit einer gewissen Zeitverzögerung. Dies hängt unter ­anderem mit der institutionellen Ausgestaltung der Kollektivvertragsverhandlungen zusammen. Aktuelle vorausschauende Indikatoren deuten ebenfalls darauf hin, dass sich das Lohnwachstum beschleunigen wird. Vor diesem Hintergrund erhebt sich die Frage, inwieweit Lohnerhöhungen die Inflation ausgleichen sollen. Wir führen in unserer Analyse Argumente dafür ins Treffen, dass die Lohnverhandlungen nicht auf einen vollen Inflationsausgleich abstellen sollten. Das implizite Ziel von Kollektivvertragsverhandlungen besteht darin, den Anteil der Löhne am Gesamteinkommen einer Volkswirtschaft konstant zu halten. Daher sollten auch in der gegenwärtigen Situation die Löhne nicht gleich stark wie die Verbraucherpreise steigen. Vielmehr sollten die Nominallöhne im Einklang mit der Arbeitsproduktivität und dem Anstieg der ­Outputpreise bzw. der Kerninflation erhöht werden.

Maßnahmen zur Bekämpfung (der Auswirkungen) der Inflation in Österreich und der EU

Doris Prammer, Lukas Reiss

Die außergewöhnlich hohe Inflation im Euroraum hat alle EU-Staaten veranlasst, umfangreiche Fiskalpakete zu schnüren. Zusätzlich dazu wurden auf EU-Ebene Notfallmaßnahmen im ­Zusammenhang mit den hohen Strompreisen ergriffen; dazu zählt etwa die Abschöpfung von unerwartet hohen Gewinnen von Stromerzeugern. Die in den einzelnen EU-Staaten umgesetzten weitreichenden Maßnahmen zur Abfederung der Inflationsfolgen unterscheiden sich in ihrer Aus­gestaltung stark voneinander. Während manche Länder vornehmlich auf preis­basierte Maßnahmen setzten (etwa zur Reduktion der Kosten fossiler Energieträger über ­Förderungen oder Steuersenkungen), wurden in Österreich überwiegend einkommens­basierte Maßnahmen – breit angelegte Transferleistungen und Steuersenkungen (einschließlich der ­Abschaffung der kalten Progression) – ergriffen. Dank des hohen Maßnahmenvolumens konnte ein größerer Rückgang des aggregierten realen Haushaltseinkommens in Österreich im Jahr 2022 verhindert werden.

Bei der politischen Entscheidung, welche Unterstützungsmaßnahmen umgesetzt werden ­sollen, haben Regierungen nicht nur Aspekte der Einkommensverteilung zu berücksichtigen, sondern auch folgende essenzielle Abwägungen ­anzustellen: Manche Maßnahmen können ­umweltpolitischen Zielen zuwiderlaufen, indem sie ineffizienten Energie­verbrauch begünstigen. Andere Maßnahmen wiederum schwächen zwar die Folgen der Teuerung für einzelne ­Haushalte ab, wirken gleichzeitig aber insgesamt inflationsfördernd. Besonders relevant sind diese Überlegungen im Zusammenhang mit Energiepreissenkungen, da die Angebotskurven für verschiedene Energieträger gegenwärtig einen steilen Verlauf zeigen (d. h. kleine Nachfrageänderungen können zu relativ großen Preisänderungen führen). Darüber hinaus konterkariert eine expansive Fiskalpolitik in Zeiten hoher Gesamt- und Kerninflation die restriktive Geldpolitik der Zentralbanken.

Inwiefern konnten Entlastungsmaßnahmen die inflationsbedingten Mehrausgaben privater Haushalte im Jahr 2022 kompensieren?

Susanne Maidorn, Lukas Reiss

Im Jahr 2022 wurden angesichts des beträchtlichen Anstiegs der Inflation umfangreiche ­fiskalische Maßnahmen ­beschlossen, um die Einkommen der privaten Haushalte in Österreich zu stützen. Diese Entlastungsmaßnahmen ­bestanden mehrheitlich aus Transfers, von denen alle Haushalte profitierten. Dementsprechend ergibt die in der vorliegenden Studie durch­geführte Analyse der Verteilungseffekte, dass der Gesamteffekt der Maßnahmen für alle Haushalte unabhängig von ihrem Einkommen sehr ähnlich war. Gemessen am Haushalts­einkommen waren einkommensschwache Haushalte stärker vom inflationsbedingten Anstieg der Konsumausgaben betroffen, und sie profitierten auch stärker von den Entlastungsmaß­nahmen. Bei den einkommensschwächsten 20 % der Haushalte kam es im Durchschnitt zu einer sehr geringfügigen Überkompensation, während bei allen anderen Haushalten die Unterstützung im Durchschnitt unter den inflationsbedingten Mehrausgaben lag.

Die Entlastungsmaßnahmen waren darüber hinaus nicht auf die unterschiedliche Inflationsbetroffenheit der Haushalte ausgerichtet. So profitierten Haushalte, die weniger stark von der Inflation betroffen waren (d. h. Haushalte mit Fernwärmeheizung in dicht besiedelten Gebieten), sowohl stärker von der Erhöhung des Klimabonus als auch – im Durchschnitt – von den ­Einmalzahlungen für Bezieher von Transferleistungen. Demgegenüber erhielten unter den ein­kommensschwächsten 40 % der Haushalte jene, die stärker von der Inflation betroffen ­waren (d. h. Haushalte in dünn besiedelten Gebieten, die mit Gas, Öl oder Holz heizen) im Durchschnitt weniger Kompensation aus den Entlastungspaketen. Für stärker betroffene Haushalte aller Einkommensgruppen fielen die Entlastungsmaßnahmen geringer aus als der inflationsbedingte Anstieg ihrer Konsumausgaben.

Wie groß ist der Effekt des Inflationsschocks 2021–22 auf Österreichs ­öffentliche Finanzen?

Johannes Holler, Lukas Reiss

Höhere Inflation trägt in der Regel zu einem höheren Wachstum der Staatseinnahmen bei, doch der Gesamteffekt der Teuerung auf den Staatshaushalt ist nicht eindeutig. Um festzustellen, wie sich der aktuelle Inflationsschock auf Österreichs Staatsfinanzen auswirkt, berücksichtigen wir in unserer Analyse insbesondere seine spezielle Ausprägung: der aktuelle Preisanstieg ist primär das Resultat des starken Anstiegs der internationalen Energiepreise und hat damit einen negativen Effekt auf das reale BIP. Unter diesen Voraussetzungen kommen wir zu dem Schluss, dass die Auswirkungen der hohen Inflation auf die öffentlichen Finanzen insgesamt eindeutig negativ sind, auch wenn sich kurzfristig ein ­kleiner positiver Effekt ergibt. Der kurzfristig positive Effekt auf den Staatshaushalt fällt allerdings viel kleiner aus als das Volumen der bereits verabschiedeten staatlichen Unterstützungen zur Abfederung der negativen Aus­wirkungen der Inflation auf Haushaltseinkommen und Unternehmen. Auch die Staatsschulden­quote geht kurzfristig zurück. Die ­laufende Verschlechterung des Budgetdefizits infolge der hohen Inflation lässt die Schuldenquote ab 2026 aber ansteigen. Darüber hinaus vergrößert die kürzlich in Österreich eingeführte Abschaffung der kalten Progression und die Indexierung der Familienleistungen die negativen Effekte des aktuellen Inflationsschocks auf den Budgetsaldo.

Studies

Aggregate price pressures along the supply chain: a euro area perspective

Teresa Messner, Thomas O. Zörner ²
Refereed by: Christian Glocker, WIFO

In this article, we take a closer look at how price pressures affect sectoral and aggregate price indices. From a central bank perspective, especially, it is important to know how price changes on a more granular level affect the aggregate price index, which is often used as a benchmark to assess price stability. We employ a vector autoregression with a set of price and macro variables and perform an impulse response analysis. A simulation of a specific price shock enables us to trace its dynamic impact on a variety of price variables over time. Our main findings indicate that (1) sectoral price pressures impact both sectoral and headline inflation, and (2) the price pass-through increases at later stages of the production process, being nearly one-to-one for changes in producer prices. Moreover, (3) upstream and intermediate energy prices have the most sizable direct effect on sectoral variables by far, while food prices appear to be stronger determinants of headline inflation. In general, our results suggest that sectoral price developments can be indeed informative for headline inflation, confirming results of more complex network models.

JEL classification: C32, E31, Q43

Keywords: price pressures, price shock transmission, sector-specific reactions to price shocks

Our main findings indicate that (1) sectoral price pressures impact both ­sectoral and headline inflation, and (2) the price pass-through increases at later stages of
the production process and is nearly immediate for changes in producer prices. Moreover, (3) (upstream and intermediate) energy prices have by far the most ­sizable direct effect on sectoral variables, while food prices appear to be stronger determinants of headline inflation. In general, our results suggest that sectoral price developments can be indeed informative about the path of headline inflation, confirming results of more complex network models (e.g. Baqaee and Farhi, 2019; or Auer et al., 2019).

1 Motivation and literature

A broad body of literature has studied the role of price dynamics at the sectoral level, trying to disentangle the role of aggregate and local, i.e. sector-specific, shocks. In general, the literature attaches much weight on aggregate shocks as ­drivers of headline inflation volatility. However, there is also evidence that sectoral shocks determine sectoral inflation developments, while aggregate developments do not play a sizable role. The persistence of headline and sectoral inflation is, however, driven by aggregate factors (see, among others, Andrade and Zachariadis, 2016; Kaufmann and Lein, 2013; de Graeve and Walentin, 2015).

However, these studies appear to not fully address the complex sectoral interlinkages in firm networks. Firms may use and produce intermediate goods that serve as input at later stages of the production chain, so when assessing the role of sectoral and aggregate shocks as determinants of inflation volatility and ­persistence, they may not be adequately disentangled (Foerster et al., 2011). More complex ­approaches make it possible to explicitly model and analyze the effects of price pressures at different sectoral stages. Globalization has made supply chains even more complex, with companies being woven into a tight network of suppliers and buyers (for a prominent example of such a modeling approach, see Baqaee and Farhi (2019) or Auer et al. (2019)). Modeling the trickling down of costs for any ­sequential input for every company involved in each sector of the economy ­requires, however, an intense effort of data work as demonstrated, for example, in Foerster et al. (2011) or Smets et al. (2018). ³ The latter find that differences in sectoral ­inflation persistence are to a large extent a result of sectoral differences in price stickiness, e.g. how fast prices of intermediate products can be adjusted and subsequently passed on. ­Furthermore, sectoral price pressures in different sectors along the supply chain can explain headline and disaggregate consumer price inflation volatility. This ­evidence would suggest that looking at sectoral price developments further up in the supply chain can be informative not only about sectoral consumer price inflation developments but also about headline dynamics.

In this article, however, we derive conclusions for consumer price changes
in the euro area by looking at such supply chain pressures from an aggregate ­perspective. Such a perspective, i.e. “the broad picture”, is necessary in the context of monetary policymaking as central banks in general focus on an aggregate price indicator. While our approach comes at some costs, we see three major advantages in the aggregate nature of our analysis. First, we rely neither on strong assumptions like, for instance, how to model nominal rigidities, nor on an explicit model stance about the underlying production networks. Second, we circumvent issues associated with the availability of data on distinct production linkages across the euro area. As mentioned above, missing data make the use of imputation techniques necessary, which ultimately may affect the reliability of the results. Finally, our analysis provides useful evidence for monetary policymakers, who base their decisions on aggregate price index developments.

In our empirical approach for unveiling aggregate price pressures along the supply chain, we estimate a small-scale Bayesian vector autoregressive (BVAR) model in the fashion of Giannone et al. (2015). For the identification of price shocks, we rely on sign restrictions proposed by Uhlig (2005). Our model ­predominantly pictures the aggregate supply side of the euro area economy at a monthly frequency. Based on our model estimation, we perform a simulation ­exercise by means of an impulse response analysis. More precisely, we simulate an unanticipated change of (1) aggregate freight costs and raw material prices (picturing price pressures at the “most upstream,” i.e. initial stage of the supply chain) as well as (2) producer prices for food, energy and consumer goods (price pressures at the intermediate level in the supply chain) and trace their effects over time. The ­dynamics of the resulting impulse response functions (IRF) allow us (1) to gauge the dynamic effects of these particular shocks and (2) compare the shape and ­magnitude of the reactions of the HICP and its components across the sources of price pressures. In other words, we are interested in the speed and extent of how different price shocks feed into aggregate consumer prices over time.

2 Empirical strategy

Our small-scale empirical model sheds light on such macro reactions over time in the euro area as a whole. The empirical application investigates the effects of unanticipated changes in upstream prices in a small-scale hierarchical vector ­autoregression (BVAR) with a Bayesian stance of estimation.

Figure 1 gives an overview of the model specifications. Overall, we estimate eight models, with an identical set of variables differing only in the (eight) ­upstream and intermediate cost or price series. All variables are defined in terms of annual rates of changes in percent. For our analysis, we simulate a one-standard deviation shock. The size of the shock in percent can be found in the first column of table 2.

We analyze price pressures in three sectors: goods, energy and food. For price pressures in the goods sector, we employ a freight cost shock (change in the Baltic Dry Index as a composite proxy for upstream supply cost pressures) and a shock to consumer goods producer prices (PPI as a proxy for intermediate prices). As far as the energy ­sector is concerned, we model oil and gas price shocks and again an energy producer price shock. Lastly, for the food sector, we model a wheat price shock, an overall food commodity price shock and again a shock to food and beverages producer prices. We run these models twice, to estimate the ­effect on the respective HICP components (consumer prices of nonenergy ­industrial goods, energy and food and beverages including alcohol and tobacco) and on the headline inflation (HICP). The BVAR models are specified with 12 lags and use monthly data spanning from December 2001 to February 2020, ­intentionally excluding the pandemic period with its pronounced volatility in ­almost all aggregate variables. ⁴ A formal representation of the model we use can be found in the appendix.

While the Bayesian approach proves useful in macroeconomic applications where data are usually scarce, the prior choice may be a crucial issue. However, by using the hierarchical approach proposed by Giannone et al. (2015), we opt for a data-based elicitation of our priors. As laid out in Kuschnig and Vashold (2021), who implemented this flexible approach in a convenient R routine, the subjectivity of prior choices and the associated uncertainty is thus alleviated. We identify the shocks through sign restrictions following Uhlig (2005); our specific ­restrictions can be found in table 1. In this table, + (–) indicates a positive (negative) on-impact reaction of a certain variable to the specific shock, while a blank cell refers to no a priori impact restriction.

Table 1: Sign restrictions in BVAR  

	Shock on
	Variables
	HICP ­headline	HICP goods	HICP ­ energy	HICP food	HICP ­services	Industrial production
Shock of	Annual rate of change
Baltic Dry Index	+	+	+	+		–
Consumer goods PPI	+	+				–
Brent crude price (USD)	+		+		+	–
Natural gas price index	+		+		+	–
Energy PPI	+		+			–
Food raw material price index	+			+		–
Wheat price index	+			+		–
Food and beverages PPI	+			+		–
Source: Authors’ compilation.
Note: A (+) indicates a positive reaction on impact of the respective variable in the system, while (-) corresponds to a negative reaction. Blank cells () denote no a priori restriction. The restrictions are imposed for one month.

Along the lines of Smets et al. (2018), as discussed in section 1 and indicated in the first column of table 1, we assume that all (positive) cost and price shocks will (eventually) push up HICP headline inflation. Apart from differences in price stickiness across sectors, the weights with which the sectoral price indices feed into the headline HICP may also impact the extent to which sectoral shocks determine headline inflation. After services (2022 weight: 42%), goods have the largest weight in the euro area HICP (26%), followed by food (21%) and energy (11%).

As indicated in the subsequent columns in table 1, we assume that (positive) sectoral price shocks result in increases in sectoral inflation. In other words, we assume freight cost, commodity, and PPI price shocks to directly impact the ­specific sectoral components of HICP inflation. A shock to freight costs and goods PPI prices will thus directly impact consumer goods prices (column 2). Likewise, a shock to energy PPI contemporaneously positively impacts HICP energy prices (column 3). The same logic also applies to an unexpected increase in food ­commodity prices that results in a direct increase in HICP food prices (column 4). The latter has been shown, inter alia, in Baumeister et al. (2014), who find ­evidence for effects of food commodity price shocks on retail food prices. However, the ­effects are apparently more prevailing in developing countries. Likewise, ­Peersman et al. (2021) document an increasing impact of oil prices on food commodity prices since the 2000s. In addition, they also find a reverse relationship between a ­shortfall of global food commodities and oil prices.

Furthermore, our restrictions assume that freight costs and energy price shocks also affect other components of HICP inflation, as discussed in Kilian (2008). ­Unexpected freight cost increases are also expected to impact food and energy HICP prices (columns 3 and 4) but not services, while energy price increases are assumed to affect only services and energy prices but not goods or food prices. This is motivated by findings of Baumeister et al. (2014), who document no link ­between oil prices and increases in food processing costs or food retail prices in the USA. Finally, as shown in the last column of table 1, all shocks are assumed to impact industrial production negatively, such that our shocks carry the notion of ­supply-side distortions in contrast to demand-specific shocks.

3 Results

3.1 Sectoral (direct) effects

As for the goods sector (chart 2, top panels), both the freight cost and PPI price shocks show a rather similar pattern (left panel), while the magnitude of the shock in percent is far more pronounced for the more volatile freight cost series (77% year on year) than for the PPI price series (0.6% year on year) as seen in table 2. ⁵ The reaction of consumer goods inflation to the shocks (right panel) is also similar, with goods price inflation increasing by 0.6 percentage points on impact of the freight cost shock and by slightly more, namely 0.9 percentage points to the PPI goods price shock. The comparably modest response can most likely be linked to final consumer goods consisting in different intermediate goods, which results in a very heterogenous supply chain structure that potentially offsets idiosyncratic distortions. Both series swiftly return to their mean, even though the impact of the supply cost shock remains significant twice as long as the PPI shock. As a ­result, the effect of the freight cost shock is rather long lasting and twice as large as the PPI shock in cumulative terms.

For energy price inflation (chart 2, middle panels), we observe that the shocks triggered by an oil and natural gas price change or shocks triggered by a PPI change reveal subtle differences (left panel). The direct impact on HICP energy price ­inflation is quite sizable (right panel). On impact, the energy price inflation jumps up by 5 to 9 percentage points. The impact of natural gas prices amounts to 5.4 percentage points (with sizable confidence intervals) and is the least persistent one (around 11 months). Given its uncertainty, it might however not be significantly different from the other shocks. This uncertainty surrounding the estimates is most likely due to the nature of our gas price series, which is an index figure that reflects global production and the market performance of natural gas contracts ­(futures). ⁶ The European natural gas market is a rather local market, consisting of different suppliers and network access. In contrast to crude oil, which is traded globally and therefore has a global price, the price for natural gas in Europe is not determined by one market. ⁷ Furthermore, gas prices feed into the HICP energy prices less directly (e.g. via heating or electricity prices) than oil prices, for which there is an almost direct link via fuel prices. In addition, it is likely that there are national policies in place shielding consumer prices from direct wholesale price changes. ⁸ The black line in this panel also shows that the impact of the PPI shock is the largest one (8.5 percentage points) and feeds into HICP energy inflation ­almost one-to-one, indicating an almost perfect pass-through. The shock persists for about 13 months and hence for about the same period of time as the one for crude oil prices. Taken together, this suggests that changes in the PPI for energy products, such as refined energy products like fuels, feed almost directly and rather persistently into HICP inflation, which is in line with evidence presented by Blair et al. (2017). This leads to a substantial cumulative impact on HICP energy prices.

In the case of food, we similarly conclude from the bottom panels of chart 2 that commodity price changes have a considerably smaller impact on HICP food prices (only around 1 percentage point on impact, illustrated by the purple and blue lines) ­compared to intermediate producer prices (about 2.5 percentage points on impact as shown by the black line). This might also be the result of the different origins of the shocks, with commodity prices being global variables whereas the PPI data are European. As suggested by Ferrucci et al. (2010), the Common Agricultural ­Policy (CAP) in the European Union may be responsible for the muted impact of food commodity prices on HICP food prices. Both effects level out after about a year.

Hence, these results indicate that the cost pass-through increases at later stages of the production process and is close to be one-to-one for changes in producer prices. This might be due to different market power or contract characteristics in earlier stages of the supply chain as indicated by Gaudin (2016) or Duso and Szücs (2017). ⁹

Table 2: Summary of our results  

Shock	One ­standard ­deviation	Variable	Effect on impact	Duration	Cumulative effect	Variable	Effect on impact	Duration	Cumulative effect
	%		Percentage points	Months	Percentage points		Percentage points	Months	(in pp)
Baltic Dry	76.7	HICP goods	0.6	23	4.5	Headline HICP	0.4	18	3.8
PPI goods	0.6		0.9	10	2.7		0.4	4	0.9
Natural gas	38.2	HICP ­ energy	5.4	11	39.0		0.3	8	1.7
Brent crude	33.7		5.6	14	64.5		0.4	13	3.6
PPI energy	10.0		8.5	13	84.0		0.6	11	4.1
Raw materials food	15.8	HICP food	1.0	13	9.8		0.4	18	5.2
Wheat price	29.9		0.9	14	10.0		0.4	20	6.4
PPI food	2.7		2.5	14	27.9		1.1	19	16.5
Source: Authors’ compilation.
Note: This table depicts the key results of our IRF analyses in section 3.1 and 3.2. The first column shows the shocks and column 2 the size of the one standard deviation shock in percent (annual rate of change). Column 3 refers to the HICP component affected by the shock, column 4 shows the effect (posterior median) on impact in percentage points, column 5 shows the duration until the shock turns insignificant (i.e. the lower standard interval crossing zero) in months. The last column shows the cumulative effect of the shock in percentage points over the duration specified in the previous column. The remainder of columns show the same for headline inflation instead of for individual HICP components.

3.2 Aggregate effects

Interestingly, the initial impact of freight cost and PPI goods price increases on headline inflation (chart 3, top right panel) is rather muted at 0.4 percentage points despite the large weight attached to goods in the HICP. In line with Furceri et al. (2022), additional freight costs, however, may feed into aggregate HICP ­inflation rather persistently. Our analysis suggests that the effects may last for about one and a half years. During this period, the supply cost shocks could add almost 4 percentage points to headline inflation. Furceri et al. (2022) argue that import ­intensity determines the size of the impact of freight cost increases on HICP ­inflation and the monetary policy regime the duration of the impact.

As for upstream and intermediate energy prices, we observe largely the same patterns as for the direct, sectoral responses. In terms of size, however, the reaction of headline inflation to energy prices, which receive a smaller weight in the HICP compared to goods or food items, remains low at 0.3 percentage points to 0.6 percentage points on impact, as can be seen in the middle right panel.

Lastly, food prices further downstream again seem to play a more prominent role for headline inflation (bottom, right panel) than those further up, accounting for 1.1 percentage points compared to 0.4 percentage points on impact. Sizable distortions in producer prices for food (including e.g. processed rather than unprocessed food) can thus lead to strong (cumulative) price increases in headline inflation (see also Ferrucci et al., 2010).

4 Conclusions

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Appendix

What is the effect of energy prices on consumer prices in Austria?
A production-side decomposition

Martin Schneider ¹⁰

Refereed by: Bettina Landau, ECB

We analyze the role of energy in consumer price developments in Austria using a ­production-side decomposition based on input-output tables. The overall share of energy in total private ­consumption expenditure amounted to 7.7% in 2018 and from then more than doubled to reach 17.7% in November 2022. In 2018, the share of energy was substantial in spending on housing (29%) and transport (26%), while it was almost negligible (1.0%) in spending on other consumer goods. In addition, we ­estimated the impact of the increase in energy wholesale prices ­between January 2021 and November 2022 on consumer prices. Under the assumption of a full absolute pass-through of energy prices, our input-output approach suggests a contribution of energy prices to headline inflation of 14.5 percentage points, which is considerably higher than the contribution of the HICP energy component in this period (6.2%). The remaining 8.3 percentage points can be seen as “inflation backlog,” which is due to the delayed ­adjustment of consumer prices for electricity, gas and district heating to wholesale energy prices. The ­degree to which this backlog will materialize and the adjustment path mainly ­depend on the future path of wholesale prices and the lag with which price changes feed through to end-user contracts and are therefore subject to considerable uncertainty. The ­Austrian government has implemented a cap on electricity prices (“Strompreisbremse”), which will reduce inflation by 0.9 percentage points in 2023. In 2024, the abolishment of the cap will increase inflation by 0.3 percentage points.

JEL classification: C6, E31

Keywords: inflation pass-through, inflation backlog, input-output model

As a result, Austria has seen a sharp rise in consumer price inflation. In ­November 2022, inflation as measured by the Harmonized Index of Producer Prices (HICP) reached 11.2%, a level even surpassing the peak during the first oil crisis in June 1974 (consumer price index (CPI): +10.4 %). Between January 2021 and November 2022, consumer prices in Austria increased by 15.8%. ­Disaggregated HICP data for Austria show that less than half (6.2 percentage points) of the ­increase since January 2021 is attributable to the energy component of the HICP, which includes household energy (electricity, gas, district heating) and fuels and lubricants for personal transport. Due to the structure of end-user contracts for electricity, gas and district heating, where prices are often fixed for one year in advance, it seems likely that there are price pressures in the pipeline which have not materialized yet. Another reason why HICP energy inflation ­understates the role of energy is that the production of other goods and services needs energy.

In this paper, we address the following questions: Firstly, what is the role of energy prices in consumer price growth beyond the HICP energy component, i.e. are there indirect effects via the production of goods and services consumed by households? Secondly, how strong has been the pass-through of energy prices to consumer price inflation so far? Thirdly, in case of an incomplete pass-through, how big is the inflation backlog that may materialize later? We use a cost-side ­approach based on input-output tables which we supplement with disaggregated data on energy consumption per industry. This enables us to calculate the energy content of each consumer good category and the impact of energy price increases on consumer prices. In addition, we can estimate the pass-through.

The paper is structured as follows: In section 1, we look into the role of energy in household consumption. In section 2, we present the input-output framework that we apply to decompose consumer prices and the results of this decomposition. Section 3 shows the decomposition of the consumer price increases since January 2021. Section 4 concludes.

1 Energy consumption of households in 2018

We have estimated household expenditure on energy based on the input-output table for Austria for 2018; at purchasing prices, this expenditure amounted to EUR 12.8 billion or 7.3% of private consumption (excluding imputed rents) in 2018. ¹¹ This share is very close to the weight of energy in the HICP (7.7%). Expenditure on energy at basic prices amounted to EUR 7.1 billion. Additionally, trade and transport margins (EUR 1.6 billion) and indirect (product) taxes less subsidies (EUR 4.1 billion) were important cost components.

Table 1: Energy consumption of households in Austria (2018)  

	Goods category		Terajoule	EUR billion
	CPA	COICOP		Energy ­consumption at basic prices	Trade and transport ­margins	Indirect taxes less subsidies	Energy ­consumption at purchasing prices	% of total ­private ­consumption3
Total			399,667	7.1	1.6	4.1	12.8	7.3
Primary energy			301,181	3.7	1.6	3.0	8.3	4.8
Fossile energy sources			212,538	3.4	1.5	3.0	8.0	4.6
Mineral oil products	C19	04.53/07.22	152,682	2.6	1.5	2.8	6.9	3.9
Processed gas	D35	04.52	59,050	0.8	–	0.3	1.1	0.6
Coal	B05-07	04.549	805	0.0	0.0	0.0	0.0	0.0
Renewables1	A022	04.5	88,643	0.3	0.1	0.0	0.4	0.2
Transformed energy			98,486	3.4	0.0	1.1	4.5	2.6
Electricity	D35	04.51	66,175	2.6	–	0.8	3.4	1.9
District heating	D35	04.550	32,311	0.9	–	0.3	1.1	0.6
Source: Statistics Austria, author’s own calculations.
1 Renweables include firewood (61%), pellets and wood briquettes (14%), ambient heat (8%), solar energy (5%), biodiesel (5%), wood waste (4%) and bioethanol (2%).
2 Besides A02 (firewood, pellets and wood briquettes), some renewables are attributable to C19 (biodiesel, bioethanol) and D35 (ambient heat).
3 Excluding imputed rents.

2 An input-output approach to decompose private consumption expenditure into their cost components

Compared to more common estimation approaches (see e.g. Baumeister and Kilian, 2014; Lopez et al., 2022), our approach has several advantages, including, most importantly, that it is not subject to structural breaks caused by the pandemic and the recent energy price hikes. Instead, we use disaggregated data on the cost structure of the production of consumer goods. The main drawbacks of our ­approach are that it does not capture dynamic relations and relies on a fixed ­production structure, i.e. there is no substitution due to changes in relative prices. In addition, we do not include second-round effects via income and employment. Although there are many examples of fully-fledged dynamic input-output models in the literature (see e.g. Kratena et al., 2017), we prefer our parsimonious ­approach for the sake of simplicity.

Chart 1 depicts the result of this decomposition for total private consumption and the 12 COICOP divisions for 2018 and November 2022. Energy consumption of households is concentrated in two goods categories: 04 (housing, water, ­electricity and other fuels) and 07 (transport). In housing, water, electricity and other fuels, energy accounted for 32.5% of total production costs in November 2022, in transport, the share amounted to 25.8%. In all other COICOP ­divisions, the share of energy in production costs was almost negligible at 1.0%. In aggregate private consumption, the share amounted to 7.7%. This is higher than the direct share we derived from the input-output tables (7.3%; see table 1). The difference is attributable to the energy content of goods and services other than energy.

To derive the energy share in total costs for the latest available month (­November 2022), we calculated the cost shares of the 64 CPA consumer good categories derived from the input-output table 2018 by updating the cost ­components with the evolution of the prices for production inputs. The cost share of energy more than doubled to 17.7% from 2018 to November 2022. ¹² In housing, water, electricity, gas and other fuels, the share rose to 55%, and in transport to 42%. In all other COICOP divisions, the share of energy more than tripled to 3.2%. This is because gas and electricity (which showed larger price ­increases than petroleum products) are more important in the production of these goods and ­services than petroleum products.

3 A decomposition of consumer price increases since January 2021

For net indirect taxes, we considered the temporary reduction of both the ­electricity tax and the tax on natural gas from May 2022 to June 2023. Both tax rates were set to the minimum rate stipulated by EU law, which amounted to a ­temporary reduction in tax rates by about 90%. Furthermore, the ecological ­surcharge on electricity prices was set to zero in 2022. The introduction of the carbon tax was postponed from July 2022 to October 2022 (Prammer and Reiss, 2022).