Inflation Differentials in the Euro Area and Their Determinants - An Empirical View PDF Download
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Author: Vaclav Zdarek
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
In this paper, we present evidence on the statistical features of observed dispersion in inflation rates in the Euro area. Our descriptive exercise shows that there is still a remarkable dispersion of HICP inflation rates and most of dispersion originates in the non-traded categories of the HICP. We examine the determinants of inflation differentials in a panel of the states of the Euro area in 1999-2007. The evidence shows that output gaps and a proxy for price level convergence were statistically significant; some determinants that were found significant in previous studies did not have impact on inflation (e.g. exchange rate).
Author: Vaclav Zdarek
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
In this paper, we present evidence on the statistical features of observed dispersion in inflation rates in the Euro area. Our descriptive exercise shows that there is still a remarkable dispersion of HICP inflation rates and most of dispersion originates in the non-traded categories of the HICP. We examine the determinants of inflation differentials in a panel of the states of the Euro area in 1999-2007. The evidence shows that output gaps and a proxy for price level convergence were statistically significant; some determinants that were found significant in previous studies did not have impact on inflation (e.g. exchange rate).
Author: Václav Žďárek
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Cristina Checherita-Westphal
Publisher:
ISBN: 9789289955164
Category :
Languages : en
Pages : 0
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Book Description
This paper provides a comprehensive empirical analysis of the role of discretionary fiscal policy for inflation differentials across the 19 euro area countries over the period 1999-2019. The results confirm existing (older) literature that it is difficult to find robust evidence of the fiscal policy stance or impulse impacting directly on inflation differentials. We do find, however, support for an indirect effect of discretionary fiscal policy on inflation differentials working through the output gap channel. There is also some evidence that fiscal policy may be especially potent in influencing inflation differentials - with fiscal tightening cooling (and fiscal expansion increasing) inflation pressures - when the economy is above its potential. Finally, going from the overall fiscal stance or impulse to individual fiscal instruments, we find that value added tax (VAT) rate changes and public wage growth are statistically significant determinants of inflation differentials in our sample.
Author: Pietro Galardi
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
In this Thesis, I investigate the effects that Euro area inflation differentials have on member countries. By means of a literature and theory review, I identify the main channels by which inflation differentials influence the real output of Euro area economies: the Real Interest Rate, the Real Exchange Rate, and the Wealth Effect channel. I use a panel data estimation on the Euro 12 countries from 1998Q1 to 2016Q3 to find that the Real Exchange Rate channel has gained prominence compared to previous empirical works found in the literature, representing an effect that is from two to four times larger than the Real Interest Rate. Instead, the Wealth Effect (proxied by changes in house prices) is at comparable levels with previous researches. Moreover, I select countries within the Euro area that are expected to be more exposed to RERs and RIRs, based on literature findings and country-specific characteristics. The estimated coefficients for these subgroups are stronger than for their Euro area counterparts. Lastly, I estimate different coefficients for the period before and after the financial crisis in 2008. I find that RIRs has become more impactful in the most recent period, while RERs effects seem to have decreased.
Author: Peter J. N. Sinclair
Publisher: Routledge
ISBN: 1135179778
Category : Business & Economics
Languages : en
Pages : 402
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Book Description
Inflation is regarded by the many as a menace that damages business and can only make life worse for households. Keeping it low depends critically on ensuring that firms and workers expect it to be low. So expectations of inflation are a key influence on national economic welfare. This collection pulls together a galaxy of world experts (including Roy Batchelor, Richard Curtin and Staffan Linden) on inflation expectations to debate different aspects of the issues involved. The main focus of the volume is on likely inflation developments. A number of factors have led practitioners and academic observers of monetary policy to place increasing emphasis recently on inflation expectations. One is the spread of inflation targeting, invented in New Zealand over 15 years ago, but now encompassing many important economies including Brazil, Canada, Israel and Great Britain. Even more significantly, the European Central Bank, the Bank of Japan and the United States Federal Bank are the leading members of another group of monetary institutions all considering or implementing moves in the same direction. A second is the large reduction in actual inflation that has been observed in most countries over the past decade or so. These considerations underscore the critical – and largely underrecognized - importance of inflation expectations. They emphasize the importance of the issues, and the great need for a volume that offers a clear, systematic treatment of them. This book, under the steely editorship of Peter Sinclair, should prove very important for policy makers and monetary economists alike.
Author: Mr.Jeffrey R. Franks
Publisher: International Monetary Fund
ISBN: 1484338499
Category : Business & Economics
Languages : en
Pages : 47
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Book Description
We examine economic convergence among euro area countries on multiple dimensions. While there was nominal convergence of inflation and interest rates, real convergence of per capita income levels has not occurred among the original euro area members since the advent of the common currency. Income convergence stagnated in the early years of the common currency and has reversed in the wake of the global economic crisis. New euro area members, in contrast, have seen real income convergence. Business cycles became more synchronized, but the amplitude of those cycles diverged. Financial cycles showed a similar pattern: sychronizing more over time, but with divergent amplitudes. Income convergence requires reforms boosting productivity growth in lagging countries, while cyclical and financial convergence can be enhanced by measures to improve national and euro area fiscal policies, together with steps to deepen the single market.
Author: Otmar Issing
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 344
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Book Description
Author: D. Howarth
Publisher: Springer
ISBN: 0230503101
Category : Business & Economics
Languages : en
Pages : 292
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Book Description
David Howarth and Peter Loedel provide a theoretically inspired account of the creation, design and operation of the European Central Bank. Issues explored include the theoretical approaches to the ECB, the antecedents of European monetary authority, the different national perspectives on central bank independence, the complex organisation of the bank, the issues of accountability and the difficult first years of the ECB in operation.
Author: Mr. Kangni R Kpodar
Publisher: International Monetary Fund
ISBN: 1616356154
Category : Business & Economics
Languages : en
Pages : 34
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Book Description
This paper investigates the response of consumer price inflation to changes in domestic fuel prices, looking at the different categories of the overall consumer price index (CPI). We then combine household survey data with the CPI components to construct a CPI index for the poorest and richest income quintiles with the view to assess the distributional impact of the pass-through. To undertake this analysis, the paper provides an update to the Global Monthly Retail Fuel Price Database, expanding the product coverage to premium and regular fuels, the time dimension to December 2020, and the sample to 190 countries. Three key findings stand out. First, the response of inflation to gasoline price shocks is smaller, but more persistent and broad-based in developing economies than in advanced economies. Second, we show that past studies using crude oil prices instead of retail fuel prices to estimate the pass-through to inflation significantly underestimate it. Third, while the purchasing power of all households declines as fuel prices increase, the distributional impact is progressive. But the progressivity phases out within 6 months after the shock in advanced economies, whereas it persists beyond a year in developing countries.
Author: Andreas Jobst
Publisher: International Monetary Fund
ISBN: 1475524471
Category : Business & Economics
Languages : en
Pages : 48
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Book Description
More than two years ago the European Central Bank (ECB) adopted a negative interest rate policy (NIRP) to achieve its price stability objective. Negative interest rates have so far supported easier financial conditions and contributed to a modest expansion in credit, demonstrating that the zero lower bound is less binding than previously thought. However, interest rate cuts also weigh on bank profitability. Substantial rate cuts may at some point outweigh the benefits from higher asset values and stronger aggregate demand. Further monetary accommodation may need to rely more on credit easing and an expansion of the ECB’s balance sheet rather than substantial additional reductions in the policy rate.
