Central banks use complex mathematical simulations to predict how oil prices affect grocery bills

Central banks like the ECB use complex simulations called DSGE frameworks to predict how energy costs influence the price of food. When oil prices rise, the costs of fertilizer, harvesting, and transportation all increase, leading to 'pass-through' effects that hit grocery bills about one to two quarters later. These models help economists understand how a spike in energy might trigger a wider wage-price spiral.