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Sources of Regional Inflation in Poland

Pawel Gajewski

Eastern European Economics, 2017, vol. 55, issue 3, 261-276

Abstract: This article unveils the role of external, national, and idiosyncratic shocks in driving regional inflation in Poland. It shows that the importance of idiosyncratic shocks is strikingly low in the Polish regions, but that regional differences in inflation co-movements can be attributed to the diverse importance of global and national shocks. Auxiliary regressions confirm that shocks which strongly and asymmetrically affect inflation in Poland and the EU also contribute to cross-regional inflation divergence in Poland. So far as can be determined, this is the first attempt to investigate the sources of regional inflation in a CEE country.

Date: 2017
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