Tetiana Vasylieva

TU Bergakademie Freiberg,

Germany;

Sumy State University, 

Ukraine

Tetiana.Vasylieva@extern.tu-freiberg.de

ORCID 0000-0003-0635-7978

Dynamic inflation responses to war-related electricity shocks: DTW-based evidence from European energy and renewables regimes

Piotr Gutowski

University of Szczecin,

Poland,

piotr.gutowski@usz.edu.pl

ORCID 0000-0001-6757-8921

Liliana Smiech

Széchenyi Istvàn University,

Hungary

liliana.smiech@gmail.com

ORCID 0009-0004-6223-1047

Abstract. Russia’s invasion of Ukraine turned wholesale electricity prices into a major, but uneven, driver of inflation across Europe. The article aims to quantify dynamic inflation responses to war-related electricity shocks and to identify distinct energy–inflation regimes conditioned by renewables penetration and structural characteristics. The analysis uses a balanced monthly panel of 26 European countries (2019–2025), combining two-way fixed-effects regressions with event-time “excess” inflation profiles and correlation- and clustering based on Dynamic Time Warping. Early-phase excess inflation around February 2022 ranges from about 0.53 percentage points (cluster 6) to 1.06 percentage points (cluster 3), with clusters 1 and 5 also showing strong overshoots (≈0.94–0.91), while only clusters 1 and 3 sustain elevated excess inflation in the medium phase (≈0.71–0.76) and all regimes converge to within –0.07 to +0.16 by the late phase. DTW clustering reveals six regimes with distinct pre-war configurations of electricity prices (approximately 49–59 EUR/MWh), renewable energy shares (approximately 24–55%), and unemployment rates (approximately 4.45–8.59%). A heterogeneous-slope FE model shows that a 100 EUR/MWh electricity shock raises the monthly HICP by only 0.03 percentage points in cluster 3 and 0.09 in cluster 5. In contrast, the effects in other clusters are small and statistically insignificant, confirming a highly uneven and often muted pass-through. 

Received: August, 2025

1st Revision: October, 2025

Accepted: December, 2025

DOI: 10.14254/2071-8330.2025/18-4/9

JEL Classification: E31, Q41, Q42, Q48, C38

Keywords: dynamic inflation responses, electricity price shocks, Dynamic Time Warping, renewable energy share, European energy–inflation regimes