The Unassuming Economist

From a paper by Jorge Alvarez, and Thomas Kroen:

“This paper investigates the relationship between energy prices and inflation dynamics in the
context of the global inflation surge during the COVID-19 pandemic. Using a comprehensive sector-level
dataset covering over 30 countries and a local projections empirical strategy, we extend previous studies that primarily focused on single-country analyses or aggregate inflation measures. Our findings indicate that while the energy shocks of 2021–2022 were remarkable, the degree of inflation passthrough of energy shocks appears to be relatively stable over time. Moreover, we show that energy price shocks significantly influence inflation through stable sectoral channels, with structural characteristics such as energy dependence and price flexibility playing critical roles in the passthrough mechanism. These results underscore the necessity of a sectoral perspective in understanding inflationary pressures and highlight the importance of detailed data on price-setting mechanisms and intersectoral connectivity in understanding the energy-inflation passthrough.”

From a paper by Afees A. Salisu, Rangan Gupta, and Riza Demirer:

“This paper examines the propagation of oil price uncertainty shocks to real equity prices using a large-scale Global Vector Autoregressive (GVAR) model of 26 advanced and emerging stock markets. The GVAR framework allows us to capture the transmission of local and global shocks, while simultaneously accounting for individual-country peculiarities. Utilising a recently developed model-free, robust estimate of oil price uncertainty, we document a statistically significant and negative effect of uncertainty shocks emanating from oil prices on the large majority of global stock markets, with the adverse effect of oil price uncertainty shocks found to be stronger for emerging economies as well as net oil-exporting nations. Interestingly, however, global stock markets exhibit a great deal of heterogeneity in their recovery following oil uncertainty shocks as some experience rapid corrections in stock valuations while others suffer from extended slumps. While the results are sensitive to the oil uncertainty measure utilised, they suggest that country diversification in the face of rising oil market uncertainty can still be beneficial for global investors as global stock markets exhibit a rather heterogeneous pattern in their recovery rates against oil market shocks.”

From a paper by Magdalena Cornejo, Michelle Hallack, and David Matias:

“This paper examines the role of renewable electricity adoption in mitigating the impact of international fossil fuel price shocks on inflation in Latin America and the Caribbean (LAC), the region with the highest proportion of renewables in its energy mix. Utilizing data from 18 LAC countries spanning 2005 to 2021, we show that renewable electricity significantly reduces the transmission of fossil fuel price shocks to both energy-specific and overall inflation. Our findings indicate that countries with larger shares of renewable electricity generation experience notably smaller inflationary impacts in response to fluctuations in global oil prices. These results underscore the positive externalities of renewable energy investment, particularly its potential to reduce the transmission of global energy price volatility to local inflation.”

From a paper by Richard Schmitz, Franziska Flachsbarth, Leonie Sara Plaga, Martin Braun, and Philipp Härtel:

“Recent events, including the pandemic, geopolitical conflicts, supply chain disruptions, and climate
change impacts, have exposed the critical need to ensure energy security and resilience in energy
systems. We review existing definitions and interrelations between energy security and resilience,
conceptualising these terms in the context of energy system transformations. We introduce a classification of disturbances into shock events and slow burn processes to highlight key challenges to energy system resilience. Examples illustrate their distinct impacts on technical, economic, and environmental system performance over time. We compile relevant recourse options across resilience capacity levels and system planning horizons to address these challenges, emphasising actionable strategies for an increasingly integrated energy system. Finally, we propose policy recommendations to integrate shock events and slow burn processes into future energy system planning, enabling forward-looking decision-making and system design to analyse and mitigate potential disruptions.”

From a paper by Amir Mohammad Moghani, and Reyhaneh Loni:

“Energy plays a critical role in the economic advancement of nations. The reliance of oil-rich countries on energy revenues underscores the importance of ensuring the security of this vital resource. Safeguarding the security of energy resources is a top priority for the national security of the producing countries. The current geopolitical landscape is heavily influenced by energy considerations, making energy governance a key factor in enhancing national security. This review paper aims to discuss and present the role of energy governance impacts on the national security of oil-rich countries based on energy governance literature. The scientific publications selected to be studied are from 2010 to 2024. The findings suggest that effective energy governance plays a crucial role in enhancing the national security of countries abundant in oil resources. It is imperative to tailor energy governance to bolster national resilience in the energy sector, given the interconnectedness of energy governance, energy security, and national security. As such, pivotal aspects of energy governance encompass revenues and resources management, stakeholder participation, global politics and international relations, and the culture and value of societies.”