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Nominal rigidities and inflation persistence in Luxembourg: a comparison with EU 15 member countries with particular focus on services and regulated prices

Patrick Lünnemann () and Thomas Mathä ()

No 14, BCL working papers from Central Bank of Luxembourg

Abstract: This paper analyses the degree of price rigidity and of inflation persistence across different product categories with particular focus on regulated prices and services for the individual EU15 countries, as well as for the EU15 and the euro area aggregates. We show that services and those HICP sub-indices considered being subject to price regulation exhibit larger degrees of nominal price rigidities, with less frequent but larger price index changes as well as stronger asymmetries between price index increases and decreases. With regard to what extent services and regulated prices contribute to the degree of overall inflation persistence, we find that, for most of the EU15 countries as well as for the EU15 and the euro area aggregates, excluding services from the full HICP results in a reduction in the measured degree of inflation persistence; for regulated indices such an effect is also discernible, albeit to a lesser extent.

Keywords: Price rigidity; inflation persistence; regulated prices; services (search for similar items in EconPapers)
JEL-codes: E31 C22 C23 C43 (search for similar items in EconPapers)
Date: 2005-04
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Published as ?Rigidities and inflation persistence of services and regulated prices? in Managerial and Decision Economics, 2010, 31: 193-208

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http://www.bcl.lu/fr/Recherche/publications/cahiers_etudes/14/BCLWP014.pdf (application/pdf)

Related works:
Journal Article: Rigidities and inflation persistence of services and regulated prices (2010) Downloads
Working Paper: Regulated and services' prices and inflation persistence (2005) Downloads
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