Vytautas Snieska

School of Economics and Business, Kaunas University of Technology,

Lithuania

vytautas.snieska@ktu.lt

ORCID 0000-0001-8777-273x

Energy price shocks and inflation dynamics in European economies: Evidence from ARDL and nonlinear ARDL models

Valentinas Navickas

Lithuania Business College,

Lithuania

valentinas.navickas@ltvk.lt

ORCID 0000-0002-7210-4410

Abstract. This study investigates the relationship between energy prices and inflation dynamics in European economies using monthly data for the period 2012–2026. The analysis focuses on the impact of Brent crude oil prices and Henry Hub natural gas prices on inflation measured by the Harmonised Index of Consumer Prices (HICP). The empirical framework employs autoregressive distributed lag (ARDL) and nonlinear ARDL models to capture both symmetric and asymmetric effects of energy price shocks. The results indicate that oil price increases exert a significant and persistent impact on inflation, while gas prices show weaker short-run effects. The nonlinear specification reveals asymmetric transmission, with inflation responding more strongly to oil price increases than decreases. The findings highlight the importance of energy market developments for inflation dynamics and provide implications for monetary policy and energy market regulation.

Received: April, 2025

1st Revision: February, 2026

Accepted: March, 2026

DOI: 10.14254/2071-8330.2026/19-1/2

JEL Classification: C23, E31, Q41

Keywords: inflation, energy prices, oil price shocks, ARDL model, nonlinear ARDL, European economies