Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This paper examines the inflationary effects of gasoline price shocks in Lebanon, an oil-importing country that is considered highly vulnerable to energy-driven inflation. Using a partially identified Bayesian Vector Autoregressive model, we find that the impact of gasoline price shocks on headline and core inflation is both limited and short-lived. Although prices in housing and utilities, as well as transport, rise sharply on impact, these effects dissipate within a few months. Moreover, aside from these two spending components, gasoline price shocks explain only a modest share of the forecast error variance. The sharp decline in gasoline prices during 2014–2016 also produced modest and transitory effects on inflation. We further examine the impact of diesel price shocks on inflation dynamics and find that their effects are smaller than those of gasoline price shocks.