Refine
Document Type
- Working Paper (2)
Language
- English (2) (remove)
Has Fulltext
- yes (2)
Is part of the Bibliography
- no (2)
Keywords
- electricity (2) (remove)
This working paper suggests to analyse agencification as a double process of institutional and policy centralisation. To that end, it develops a categorisation of agencies that incorporates these two dimensions. More specifically, it is argued that mixed outcomes where the levels of institutional and policy centralisation diverge can be expected to be the rule rather than the exception, in line with the hybrid nature of EU agencies as inbetweeners. Moreover, the fiduciary setting hits important legal constraints given the limits to delegation in the EU context. Against this backdrop a process whereby institutional centralisation develops incrementally and remains limited, yet is accompanied by a process of substantial policy centralisation, appears as the most promising path for EU agencification. A fiduciary setting, where a strong agency enjoys a high degree of independence and operates in a centralised policy space, by contrast, should be the exception. The comparative study of the process of agencification in the energy and banking sector is insightful in the light of these expectations. The incremental nature of institutional change in energy exemplifies the usual path of agencification, which is conducive to a weak agency operating in a relatively centralised policy space. Agencification in banking, by contrast, has led to a rather unusual outcome where the strong agency model combines with a fragmented policy context.
Consumers purchase energy in many forms. Sometimes energy goods are consumed directly, for instance, in the form of gasoline used to operate a vehicle, electricity to light a home, or natural gas to heat a home. At other times, the cost of energy is embodied in the prices of goods and services that consumers buy, say when purchasing an airline ticket or when buying online garden furniture made from plastic to be delivered by mail. Previous research has focused on quantifying the pass-through of the price of crude oil or the price of motor gasoline to U.S. inflation. Neither approach accounts for the fact that percent changes in refined product prices need not be proportionate to the percent change in the price of oil, that not all energy is derived from oil, and that the correlation of price shocks across energy markets is far from one. This paper develops a vector autoregressive model that quantifies the joint impact of shocks to several energy prices on headline and core CPI inflation. Our analysis confirms that focusing on gasoline price shocks alone will underestimate the inflationary pressures emanating from the energy sector, but not enough to overturn the conclusion that much of the observed increase in headline inflation in 2021 and 2022 reflected non-energy price shocks.