ECONOMIC IMPACTS OF ENERGY PRICE SHOCKS IN THE EU DRIVEN BY CRISES

Abstract

This paper illustrates the impact of the rising prices of the main natural resources used in the production process, oil, and natural gas, on the eurozone economy using a Vector Autoregressive (VAR) model. It also assesses the dependence of the eurozone economy on fossil fuels from Russia and the need to adopt green, renewable energy. The study compares the shocks administered pre/post the outbreak of the Covid-19 pandemic and the outbreak of the war in Ukraine. Finally, based on the futures trajectory of the Brent oil price, a conditional forecast for macroeconomic variables in the euro area is assessed.

Keywords

• energy
• macroeconomics
• var
• crises
• matlab.