Dynamics and Factors of Inflation Convergence in the European Union

Arbeitspapier

We provide comprehensive evidence of the widespread occurrence of inflation convergence between all countries of the European Union from 1999 to 2016. We also show that convergence was more inclusive in the years after the global financial crisis-including the European sovereign debt crisis and the period of zero lower bound-and that price-stabilityoriented monetary strategies might have in fact facilitated this convergence. Our results are robust with respect to the use of three inflation benchmarks (the cross-sectional average, the inflation target of the European Central Bank, and the Maastricht criterion), structural breaks, and a core inflation measure. Our main findings imply that further enlargement of the euro area is feasible from the perspective of the convergence of inflation rates between the countries of the European Union.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IES Working Paper ; No. 24/2017

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Price Level; Inflation; Deflation ; Central Banks and Their Policies ; Macroeconomic Issues of Monetary Unions ; Financial Crises ; International Law
• Subject: inflation convergence ; European Union ; global financial crisis ; zero lower bound ; monetary strategy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Broz, Vaclav ; Kocenda, Evzen
• Event: Veröffentlichung
• (who): Charles University in Prague, Institute of Economic Studies (IES)
• (where): Prague
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/174217
• Last update: 10.03.2025, 11:44 AM CET