Testing for Inflation Convergence among European Union Countries:A Panel Approach

Maria Tsafa-Karakatsanidou () and Stilianos Fountas
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Maria Tsafa-Karakatsanidou: Department of Economics, University of Macedonia

Discussion Paper Series from Department of Economics, University of Macedonia

Abstract: This paper attempts to test for inflation convergence in a sample of twenty-four European Union countries. To tackle this issue, first- and second-generation panel unit root and stationarity tests are employed so as to provide evidence of inflation convergence before and after the launch of the single currency, the euro. We also test for and then allow for cross-sectional dependence. In general, the findings reveal that conditional inflation convergence exists for all panels under study. The estimation of half lives shows that the evidence for faster speed of convergence applies for the new member states followed by the core countries and the old member states.

Keywords: Inflation Convergence; EU; Maastricht Criteria; Panel data. (search for similar items in EconPapers)
JEL-codes: C33 E3 F33 (search for similar items in EconPapers)
Date: 2018-09, Revised 2018-09
New Economics Papers: this item is included in nep-eec, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Testing for Inflation Convergence Among European Union Countries: A Panel Approach (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:mcd:mcddps:2018_09

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