14 Dec 2022

Energy prices and inflation

One shock, many asymmetric effects

Daniel Gros / Farzaneh Shamsfakhr

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Inflation is a pressing economic problem on both sides of the Atlantic but as US inflation starts to ebb, Europe continues to suffer under a stubbornly high inflation rate that has yet to show clear signs of dissipating.

This CEPS Explainer addresses the asymmetries in energy price inflation across the Atlantic, as well as within the euro area, and details the determining factors. It highlights the role of national subsidies schemes in driving the inflation dispersion across euro area countries.