With the reopening of the economic after the restrictions due to the pandemic, also demand forces contributed to the dynamics of the business cycle. [...] The adverse energy supply shocks originated from the cut of the gas supply from Russia to the European Union in the summer 2021, which contributed to the slow replenishment of gas inventories in Europe ahead of the winter season and, as a result, energy prices rose. [...] As for the identification of the energy supply shocks, we employ retail energy prices together with the output of the energy-intensive sector and the extreme volatility in retail energy prices recorded with the gas shortages in the Autumn 2021 and the begin of the war in Ukraine. [...] www.suerf.org/publications/ SUERF Policy Brief, No 863 2 The role of supply chain disruption shocks and energy shocks on GDP, core consumer price and expected inflation Figure 1: Output and price response to supply chain disruption shocks and energy supply shocks (percent, x-axis: months) Notes: The chart reports the impulse response function and the 84% credible sets of key variables. [...] Since the partial reopening of the economy in the summer of 2021, 10% of the 3.4% increase in core HICP and 20% of the 0.6% increase in 2-year ahead inflation expectations are attributed to demand shocks.
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