Pakistan Institute of Development Economics

THE PAKISTAN DEVELOPMENT REVIEW 

Oil Price Pass-through to Domestic Inflation: Evidence from CPI and WPI Data of Pakistan

This paper aims to find the pass-through of oil price to consumer and producer prices in Pakistan. We estimate a recursive VAR model to investigate pass-through of oil prices to domestic prices for the period of July 1991 to December 2015. The findings of the paper are (1) the oil price have moderate effect on domestic inflation (2) oil price pass-through is stronger in WPI than CPI (3) the impact of oil price pass-through is more pronounced in the period 2008 to 2015 (4) oil price has asymmetric impact on domestic inflation.

Talah Numan Khan And Wasim Shahid Malik

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