Preferences over inflation and unemployment in Europe: a north–south divide?
Malte Hübner and
Marcus Klemm ()
International Review of Economics, 2015, vol. 62, issue 4, 319-335
We use data on individual life satisfaction to estimate the costs associated with inflation and unemployment for 15 European countries, starting in the 1970s. This allows us to calculate country-specific inflation aversion relative to unemployment aversion. We find a considerable heterogeneity across European countries. There is no or only a small degree of relative inflation aversion for those countries that were characterized by above-average inflation rates in the decade preceding the current crisis in the euro area. Among the countries with a higher relative inflation aversion, the results correspond less clearly with historical inflation patterns. Copyright Springer-Verlag Berlin Heidelberg 2015
Keywords: Inflation aversion; Unemployment; Stability culture; Life satisfaction; E50; I31; Z13 (search for similar items in EconPapers)
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