Chart 11
Confidence bands for consumer prices
(deviation from baseline following 1% increase in effective exchange rate, energy
price or non-energy commodity prices)
0.01
0.01
0.04 -,
0.03 -
0.01
0.00
0.00
0.00
0.01
0.01
CPFDPR - food com. prices
0.03 -
0.02 -
0.02 -
0.01 -
0.00
0.00
0.01
0.01
0.00
0.00
0.01 -
0.00
0.00
14 16
CPFDPR: HICP processed food; CPNEIG: HICP non-energy industrial goods; CPSERV: HICP services; NEER:
nominal effective exchange rate of the euro.
There are several conclusions which can be drawn from the confidence intervals. First of all,
the results show that the estimates of the impact multipliers are significantly different from
zero at 5% in all cases except for the impact of industrial raw material prices on non-energy
industrial goods consumer prices where the confidence bands include zero from 3 to 7
quarters. Second, due to the non-standard approach of estimating successively impact
multipliers along the pricing chain, some of the simulations lay outside the confidence bands.
This is the case for the impact of industrial raw material prices on the producer price of
consumer goods (during the 1st year), and for the impact of industrial raw material prices on
the HICP non-energy industrial goods, where the simulation is close to the upper band over
the first 3 years and exceeds the band thereafter. Third, the impulse responses reported in
Я ECB
Working Paper Series No 1104
November 2009
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