Regional inflation and industrial structure in monetary union

Jun Nagayasu

MPRA Paper from University Library of Munich, Germany

Abstract: It is often argued that an optimal currency area requires homogeneous regional inflation. However, previous empirical studies point out heterogeneity in sectoral inflation and geographical concentration of industries within a monetary union. It follows that there must be a difference in regional inflation in such a union. We examine this view using regional data from Japan which has experienced a period of rapid change in industrial structure, and show that economic structure is closely related to heterogeneous regional inflation. This study suggests that heterogeneous inflation can be a prevailing and long-lasting phenomenon in a monetary union.

Keywords: Regional inflation; Monetary union; Optimal currency area; Industrial structure (search for similar items in EconPapers)
JEL-codes: E5 F4 R1 (search for similar items in EconPapers)
Date: 2012-03-01
New Economics Papers: this item is included in nep-geo and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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