TO WHAT EXTENT DID THE 2022 INFLATION SHOCK GENERATE HETEROGENEOUS PURCHASING POWER OUTCOMES ACROSS SELECTED EURO AREA COUNTRIES, AND WHICH STRUCTURAL FACTORS CAN ACCOUNT FOR THESE DIFFERENCES?

The 2022 inflation shock, triggered by the post-pandemic recovery and the energy crisis following Russia's invasion of Ukraine, affected the entire euro area. Yet its consequences were far from uniform: inflation rates and purchasing power outcomes varied substantially across member states despite a common monetary policy. This thesis investigates why a common external shock generated heterogeneous economic outcomes within the euro area, focusing on five countries: Belgium, Germany, France, Italy and the Netherlands. The analysis combines a review of the literature on energy shocks, inflation convergence and labour market institutions with a descriptive and exploratory empirical investigation based on harmonised Eurostat data (2002–2025). Monthly HICP data show that the 2022 shock unfolded in successive stages, with energy inflation rising first, followed by food and core inflation. Inflation dispersion across countries, stable for two decades, increased sharply in 2022 before gradually re-converging. Real disposable income per capita also followed markedly different trajectories, with Germany and the Netherlands outperforming Italy, indicating that inflation alone cannot explain purchasing power outcomes. Two complementary empirical analyses examine possible transmission channels: an exploratory crosssectional regression suggests a positive association between energy dependency and peak inflation (R² = 0.29), while a more robust quarterly panel regression (N = 120) shows that nominal wages responded only partially to inflation, with this response differing significantly across countries. These findings suggest that the 2022 inflation episode resulted from the interaction between a common shock and heterogeneous national structures, including energy dependency, wage-setting institutions and fiscal policy responses. They confirm that monetary integration does not eliminate the need for national economic resilience, and that policymakers should consider complementary fiscal, energy and labour market measures to mitigate unequal purchasing power losses in future inflationary episodes.