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Publication Detailed Description
Journal Title
Scottish Journal of Political Economy
Year (definitive publication)
N/A
Language
English
Country
United States of America
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Abstract
The surge in Eurozone inflation in 2022 compelled European governments to implement unconventional fiscal policies. One initiative, the Iberian Exception, imposed a cap on the cost of natural gas used for electricity generation in Portugal and Spain. Using a Bayesian Vector Autoregressive model combined with Bayesian Dynamic Forecasting, we predict a 3.14 p.p. in energy inflation from July 2022 to December 2023. The effect was asymmetric over time, given the structure of contracts and hedging mechanisms within the Iberian Electricity Market. The results highlight the effectiveness of unconventional fiscal policies for managing supply-driven inflationary pressures.
Acknowledgements
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Keywords
Bayesian Dynamic Forecast,Bayesian Vector Autoregressive model,Iberian exception,Inflation,Unconventional fiscal policies
Fields of Science and Technology Classification
- Economics and Business - Social Sciences
- Sociology - Social Sciences
- Political Science - Social Sciences
Funding Records
| Funding Reference | Funding Entity |
|---|---|
| UID/315/2025 | Fundação para a Ciência e a Tecnologia |
