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This research investigates how fluctuations in natural gas prices affect electricity prices and broader economic indicators in Italy.

Gas‒electricity price transmission and the 2026 energy shock: evidence from Italy

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This research investigates how fluctuations in natural gas prices affect electricity prices and broader economic indicators in Italy.
Analyzed monthly data from 2021 to 2026 on TTF gas prices, Brent oil prices, wholesale electricity prices, inflation, industrial production, and electricity demand.
Employed baseline regressions, vector autoregressive (VAR) models, impulse response functions (IRFs), and Granger causality tests for analysis.
Explored the dynamic propagation of energy shocks to understand the relationship between gas prices and electricity price formation.
Natural gas prices significantly influence wholesale electricity prices in Italy, demonstrating a strong pass-through effect.
Granger causality tests reveal that increases in electricity prices subsequently impact inflation and industrial production.
The findings indicate a specific vulnerability of energy-dependent economies like Italy during periods of gas market stress.

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Analysis examines energy price impacts on the Italian economy, indicating significant vulnerabilities during crises.

Marco Mele (2026) studied this question.

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