Did the introduction of the euro impact on inflation uncertainty? - An empirical assessment

Matthias Hartmann and Helmut Herwartz

No 396, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: We study the impact of the introduction of the European Monetary Union on inflation uncertainty. Two groups of economies, one consisting of three European Union members which are not part of the EMU and one of six OECD member economies, are used as control groups to contrast the effects of monetary unification against the counterfactual of keeping the status quo. We find that the monetary unification provides a significant payoff in terms of lower inflation uncertainty in comparison with the OECD. Regarding the difficulty of quantifying the latent inflation uncertainty, results are found to be robust over a set of four alternative estimates of inflation risk processes.

Keywords: Monetary policy regimes; euro introduction; inflation uncertainty; uncertainty measures; Did the introduction of the euro impact on infla; Hartmann; Herwartz; European Economy. Economic Papers (search for similar items in EconPapers)
JEL-codes: C53 E31 E42 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2009-12
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-mon
References: View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0396

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