Abstract. Using U.S. and Euro area data, we document that (i) the pass-through of energy prices to inflation is state-dependent - stronger when supply chain uncertainty is elevated - and (ii) in such states, energy prices become more informative about logistical conditions. We develop a model in which firms combine energy and a specialized input transported through a capacity-constrained transportation network. When congestion binds, energy remains available in local markets at a premium, whereas the specialized input is subject to delivery delays. Because energy prices reflect both raw energy shocks and transportation conditions, firms treat them as noisy signals of supply disruptions and update beliefs through Bayesian learning. This signal-extraction channel increases perceived marginal costs, generating an uncertainty wedge that amplifies and propagates energy shocks. Within a general-equilibrium New Keynesian model, the mechanism raises the impact elasticity and the persistence of inflation in response to transitory energy shocks. This challenges the conventional monetary policy prescription to “look through” supply disturbances. ...

ECB bulletin article

Abstract. We estimate the macroeconomic effects of U.S. tariff shocks in a Bayesian VAR identified through narrative dominance. In the short run, tariffs transmit as a negative demand shock: they reduce both activity and inflation, and prompt a monetary policy easing. Furthermore, they depreciate the effective U.S. dollar exchange rate, and generate an S-shaped improvement in the trade balance. These average effects depend critically on structural trade policy uncertainty (S-TPU)—uncertainty about the persistence of the trade-policy regime—which we estimate from a state-space stochastic-volatility model of tariff rates. When S-TPU is low, tariffs raise activity and inflation and appreciate the dollar, consistent with textbook predictions. When S-TPU is high, the same shock depresses activity, depreciates the dollar, and prompts a more accommodative monetary response. We rationalize these findings in an equilibrium model of the exchange rate with uncertainty about the persistence of tariff policy. ...