Oil Shocks and Inflation The Case of Chile and a Sample of Industrial Countries

Abstract

We evaluate the inflationary impact of an oil shock on several components of the consumer price index for several countries including Chile. All the countries in our sample display a significant response in headline inflation, energy inflation and non-core inflation. We also find a significant response in core inflation for all countries other than the U.S and France. Chile’s inflationary response is one of the highest and most persistent of the sample. Indeed, Chile’s response in headline, total and non-core inflation is above average. Notwithstanding the above, we notice that the size and persistence of inflation responses are rather moderate.