Rigidities and inflation persistence of services and regulated prices

Patrick Lünnemann and Thomas Mathä
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Patrick Lünnemann: Banque centrale du Luxembourg, Economics and Research Department, Boulevard Royal, Luxembourg, Postal: Banque centrale du Luxembourg, Economics and Research Department, Boulevard Royal, Luxembourg

Managerial and Decision Economics, 2010, vol. 31, issue 2-3, 193-208

Abstract: This paper studies price level rigidity and inflation persistence for EU15 member states using data on more than 1500 HICP sub-indices. Services and HICP sub-indices subject to price regulation exhibit a higher degree of price rigidity, with less frequent but larger index changes and a stronger asymmetry between increases and decreases. For most countries as well as for the EU15 and the euro area aggregates, excluding services from the HICP leads to a lower measured degree of inflation persistence; a similar though smaller effect is obtained by removing regulated indices from the HICP. Copyright © 2010 John Wiley & Sons, Ltd.

Date: 2010
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Related works:
Working Paper: Nominal rigidities and inflation persistence in Luxembourg: a comparison with EU 15 member countries with particular focus on services and regulated prices (2005)
Working Paper: Regulated and services' prices and inflation persistence (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:31:y:2010:i:2-3:p:193-208

DOI: 10.1002/mde.1489

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