A COMPARATIVE ANALYSIS OF REAL AND PREDICTED INFLATION CONVERGENCE IN CEE COUNTRIES DURING THE ECONOMIC CRISIS

Mihaela Simionescu

CES Working Papers, 2014, vol. 6(2), issue 2, 142-155

Abstract: The main objective of this study is to make a comparative analysis of inflation convergence in Central-Eastern European countries (CEE countries) during the economic crisis over 2008-2013. For Bulgaria, Czech Republic, Hungary, Poland, Romania and Slovakia the inflation convergence has decreased in the analyzed period, the coefficient of variation (64.22%) showing strong divergence compared to the slow divergence indirectly predicted by the European Commission. The negative catch-up rates for Bulgaria, Poland and Slovakia explain the large negative consequences of the actual economic crisis for these countries. The Fisher-type test for panel data indicated no convergence for real and predicted inflation convergence. The analysis based on random effects models indicated an inflation convergence rate of 15.47% in CEE economies compared to a predicted convergence rate of 2.04%.

Keywords: convergence; forecasts; accuracy; catch-up rate; panel unit root test Romania (search for similar items in EconPapers)
JEL-codes: C53 E37 E52 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:jes:wpaper:y:2014:v:6:i:2:p:142-155

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