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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

Abstract: 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)
Date: 2015
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DOI: 10.1007/s12232-015-0235-y

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