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Oil and petrol prices inflation perceptions and inflation expectations evidence from New Zealand2.06 MB
Published Version (Advanced Access)CC BY-NC-ND V4.0, Open Access
Journal article
Oil and petrol prices, inflation perceptions, and inflation expectations: evidence from New Zealand
Applied Economics, Vol.58(11), pp.2109-2120
2026
Abstract
I use a structural vector autoregression model to analyse the links between oil prices, petrol prices, inflation, inflation perceptions, and inflation expectations in New Zealand. Findings reveal that although inflation expectations are sensitive to shocks to oil prices, petrol prices, and inflation itself, they are considerably more sensitive to inflation perception shocks. Shocks to inflation perceptions explain 54% of the forecast error variance in inflation expectations after one quarter and 37% after 18 months. The results underscore the importance of including inflation perceptions in models seeking to account for inflation expectations and their associations with energy prices.
Details
- Title
- Oil and petrol prices, inflation perceptions, and inflation expectations: evidence from New Zealand
- Authors
- Puneet Vatsa (Corresponding Author) - Lincoln University
- Publication details
- Applied Economics, Vol.58(11), pp.2109-2120
- Publisher
- Routledge
- Date published
- 2026
- DOI
- 10.1080/00036846.2025.2473115
- ISSN
- 1466-4283; 0003-6846
- Copyright note
- © 2025 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent.
- Data Availability
- The data that support the findings of this study are available from the corresponding author, Puneet Vatsa, upon request.
- Organisation Unit
- School of Business and Creative Industries
- Language
- English
- Record Identifier
- 991125205602621
- Output Type
- Journal article
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