Publications - Working Papers IER SAS

The exposure of households to changes in global oil prices through price transmission mechanisms represents an important topic in relation to possible negative consequences for certain income groups. The results of the previous studies suggest two main possible channels through which the price pass-through could materialize: direct and indirect. Additionally, the asymmetric reaction of local prices to oil price volatility should be expected on the basis of empirical findings from previous research. Interestingly, the impact of the oil prices was not sizeable in the case of 3 service groups: one mainly publicly provided in Slovakia (Health) and two predominantly private-based (Recreation and Culture, and Restaurants and hotels). Our results for the analysed commodity and service categories together with property prices suggest significantly more frequent asymmetric effects, both in the long and short term. Finally, the findings demonstrate the more profound effects of local prices on oil price growth and suggest that the local price level is less responsive to decreases in global oil prices both in the short and long run.