Second-round effects after oil-price shocks: Evidence for the euro area and Germany

- We estimate second-round effects (SRE) on wages induced by oil-price shocks.
- Specifically, we show wage responses net of movements induced through CPI changes.
- We do so by using a structural vector autoregression methodology.
- Results show that there is no strong evidence for SRE in the euro area and even less so in Germany in response to oil-price shocks.

We investigate second-round effects caused by oil-price shocks, calculating wage responses net of those movements that are induced through CPI changes. Results show no strong evidence for second-round effects in the euro area, and even less so in Germany.