Forces Driving Inflation in the New EU10 Members

Emil Stavrev

No 2009/051, IMF Working Papers from International Monetary Fund

Abstract: The paper analyzes the forces driving inflation in the new EU10 member countries. A significant part of headline inflation in these countries is due to common factors, such as price level convergence and EU integration. However, idiosyncratic factors have also played a role in the inflation process. These factors are related to the country-specific financial conditions, pass-through from foreign prices, and demand-supply situation in each country, although administered price adjustments and increases of indirect taxes associated with EU accession are also likely to have played a role.

Keywords: WP; price level; inflation expectation; Maastricht inflation criterion; inflation; generalized dynamic factor model; price convergence; food inflation; inflation in the NMS; NMS policy; inflation dynamics; NMS relative; NMS country; Nominal effective exchange rate; Energy prices; Exchange rate arrangements; Real interest rates; Global (search for similar items in EconPapers)
Pages: 18
Date: 2009-03-01
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Citations: View citations in EconPapers (10)

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