How far from the Euro Area? Measuring convergence of inflation rates in Eastern Europe

Bettina Becker () and Stephen Hall

Economic Modelling, 2009, vol. 26, issue 4, 788-798

Abstract: We present a common factor framework of convergence which we implement using principal components analysis. We apply this technique to a dataset of monthly inflation rates of EMU and the Eastern European New Member Countries (NMC) over 1996-2007. In the earlier years, the NMC rates moved independently from an average of the three best performing countries over the past twelve months, while they moved somewhat closer in line with them in the later years. Looking at the sample of the EMU and NMC countries as a whole, there is evidence of a formation of convergence clubs across the two groups.

Keywords: Convergence; Inflation; rates; European; Monetary; Union; Principal; components; analysis (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264-9993(09)00025-X
Full text for ScienceDirect subscribers only

Related works:
Working Paper: How Far From the Euro Area? Measuring Convergence of Inflation Rates in Eastern Europe (2009)
Working Paper: How Far From the Euro Area? Measuring Convergence of Inflation Rates in Eastern Europe (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:26:y:2009:i:4:p:788-798

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().