Does European Monetary Union make inflation dynamics more uniform?

Stefano Iacus () and Giuseppe Porro

Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano

Abstract: Using a nonparametric method to characterize Markovian operators, we describe the evolution of the short-run inflation processes among the EMU countries between 1996 and 2012. While a progressive clustering pattern can be outlined in the first half of the period - showing that the monetary union makes price dynamics more homogeneous - starting from 2004 an increase in price volatility makes the clustering pattern unstable, as the analysis of the changing points of the inflation processes confirms.

Keywords: inflation dynamics; EMU; Markov process; cluster analysis (search for similar items in EconPapers)
JEL-codes: C22 C38 E31 (search for similar items in EconPapers)
Date: 2013-06-29
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Journal Article: Does European Monetary Union make inflation dynamics more uniform? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:mil:wpdepa:2013-12

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