A Policy-sensible Core-inflation Measure for the Euro Area PDF Download

Author: Stefano Siviero
Publisher:
ISBN:
Category : Inflation (Finance)
Languages : en
Pages : 54

View

Book Description

Author: Riccardo Cristadoro
Publisher:
ISBN:
Category : Index numbers (Economics)
Languages : en
Pages : 52

View

Book Description

Author: Mr.Yasser Abdih
Publisher: International Monetary Fund
ISBN: 1484372565
Category : Business & Economics
Languages : en
Pages : 25

View

Book Description
Despite closing output gaps and tightening labor markets, inflation has remained low in the euro area. Based on an augmented Phillips Curve framework, we find that this phenomenon—sometimes attributed to low global inflation—has been primarily caused by a remarkable persistence of inflation, keeping it low despite the reduction in slack. This feature is shown to be specific to the euro area (in comparison with the United States). Monetary policy needs to stay accommodative to help guide inflation back to target.

Author: Alberto Alesina
Publisher: Centre for Economic Policy Research
ISBN: 9781898128595
Category : Business & Economics
Languages : en
Pages : 76

View

Book Description
This volume begins with a review of the main events of the year and how the European Central Bank has dealt with them. The report then deals with the relationships between the ECB and the eurogroup, how the Council make monetary policy decisions and macroeconomic adjustment in the monetary union.

Author: John H. Rogers
Publisher:
ISBN:
Category : Convergence (Economics)
Languages : en
Pages : 48

View

Book Description
"If price levels are initially different across the euro area, convergence to a common level of prices would imply that inflation will be higher in countries where prices are initially low. Price level convergence thus provides a potential explanation for recent cross-country differences in European inflation, a worrisome development under the ECBs "one-size-fits-all" monetary policy. I present direct evidence on price level convergence in Europe, using a unique data set, and then investigate how much of the recent divergence of national inflation rates can be explained by price level convergence. I show that between 1990 and 1999 prices did become less dispersed in the euro area. Convergence is especially evident for traded goods, and more in the first half of the 1990s than the second half. By some measures, traded goods price dispersion across the euro area is now close to that across U.S. cities. Despite an on-going process of convergence, deviations from the law of one price are large. Finally, I find a statistically-significant and robust negative relationship between the 1999 price level and 2000 inflation rate in Europe, and that the contribution of price level convergence to explaining inflation differentials is often quite important economically. Still, factors other than price convergence explain most of the cross-country inflation differences."

Author: Claudio Morana
Publisher:
ISBN:
Category :
Languages : en
Pages : 59

View

Book Description

Author: Juan-Luis Vega
Publisher:
ISBN:
Category : Inflation (Finance)
Languages : en
Pages : 54

View

Book Description

Author: Ms.Florence Jaumotte
Publisher: International Monetary Fund
ISBN: 1463983646
Category : Business & Economics
Languages : en
Pages : 36

View

Book Description
While inflation differentials in a monetary union can be benign, reflecting a catch-up process, or an adjustment mechanism to asymmetric shocks or different business cycles, they may also indicate distortions related to inefficiencies in domestic product and labor markets that amplify or make more persistent the impact of shocks on inflation. The paper examines the determinants of inflation differentials in the euro area, with emphasis on the role of country specific labor and product market institutions. The analysis uses a traditional backward-looking Phillips curve equation and augments it to explore the role of collective bargaining systems, union density, employment protection, and product market regulation. The model is estimated over a panel dataset of 10 euro area countries over the period 1983-2007. Results show that high employment protection, intermediate coordination of collective bargaining, and high union density increase the persistence of inflation. Oil and raw materials price shocks are also more likely to be accommodated by wage increases when the degree of coordination in collective bargaining is intermediate. These results are robust to different estimation methods, model specifications, and outliers. The paper suggests that reforming labor market institutions may improve the functioning of the euro area by reducing the risk of persistent inflation differentials.

Author: Otmar Issing
Publisher: Cambridge University Press
ISBN: 9780521788885
Category : Business & Economics
Languages : en
Pages : 220

View

Book Description
A non-technical analysis of the monetary policy strategy, institutions and operational procedures of the Eurosystem, first published in 2001.

Author: Mr.Plamen Iossifov
Publisher: International Monetary Fund
ISBN: 1484389751
Category : Business & Economics
Languages : en
Pages : 34

View

Book Description
The synchronized disinflation across Europe since end-2011 raises the question of whether non-euro area EU countries are affected by the undershooting of the euro area inflation target. To shed light on this issue, we estimate an open-economy, New Keynsian Phillips curve, in which we control for imported inflation. Regression results suggest that falling food and energy prices have been the main disinflationary driver. But low core inflation in the euro area has also had a clear and significant impact. Countries with more rigid exchange-rate regimes and higher share of foreign value added in domestic demand have been more affected. The scope for monetary response to low inflation in non-euro area EU countries depends on concerns about financial stability and unanchoring of inflationary expectations, as well as on exchange rate regime and capital flows dynamics.