Catching-up and inflation in Europe: Balassa-Samuelson, Engel’s Law and other Culprits
dc.contributor.author | Egert, Balazs | |
dc.date.accessioned | 2016-08-30T19:49:17Z | |
dc.date.available | 2016-08-30T19:49:17Z | |
dc.date.issued | 2010-06-01 | |
dc.identifier.other | RePEc:wdi:papers:2010-991 | |
dc.identifier.uri | https://hdl.handle.net/2027.42/133004 | |
dc.description.abstract | This study analyses the impact of economic catching-up on annual inflation rates in the European Union with a special focus on the new member countries of Central and Eastern Europe. Using an array of estimation methods, we show that the Balassa-Samuelson effect is not an important driver of inflation rates. By contrast, we find that the initial price level and regulated prices strongly affect inflation outcomes in a nonlinear manner and that the extension of Engel’s Law may hold during periods of very fast growth. We interpret these results as a sign that price level convergence comes from goods, market and non-makret service prices. Furthermore, we find that the Phillips curve flattens with a decline in the inflation rate, that inflation is more persistant and that commodity prices have a stronger effect on inflation in a higher inflation environment. | |
dc.relation.ispartofseries | wp991 | |
dc.subject | European Union | |
dc.subject | inflation | |
dc.subject | Balassa-Samuelson | |
dc.subject | real convergence | |
dc.subject | catching up | |
dc.subject | Bayesian model average | |
dc.subject | non-linearity | |
dc.subject.other | E43 | |
dc.subject.other | E50 | |
dc.subject.other | E52 | |
dc.subject.other | C22 | |
dc.subject.other | G21 | |
dc.subject.other | O52 | |
dc.title | Catching-up and inflation in Europe: Balassa-Samuelson, Engel’s Law and other Culprits | |
dc.type | Working Paper | |
dc.subject.hlbsecondlevel | Economics | |
dc.subject.hlbtoplevel | Business | |
dc.contributor.affiliationum | William Davidson Institute | |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/133004/1/wp991.pdf | |
dc.contributor.authoremail | balazs.egert@oecd.org | |
dc.owningcollname | William Davidson Institute (WDI) - Working Papers |
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