Regional Inflation Dynamics within and across Euro Area and a Comparison with the US

Guenter Beck and Massimiliano Marcellino
Authors registered in the RePEc Author Service: Kirstin Hubrich ()

No 338, Computing in Economics and Finance 2006 from Society for Computational Economics

Abstract: We investigate co-movements in inflation dynamics within and across euro area regions and find it important for monetary policy to monitor regional inflation dynamics to enhance the understanding of aggregate inflation. We employ a model where regional inflation dynamics are explained by common euro area and country specific factors and an idiosyncratic regional component. We find substantial common area wide component, that can be related to common euro area monetary policy, to exchange rate and oil prices changes. The effects of the area wide factors differ across regions, however. We also find a substantial national component. Our findings do not differ substantially before and after EMU. Analysing US regional inflation developments yields similar results regarding the relevance of common US factors.

Keywords: regional inflation dynamics; euro area and US; common factor models (search for similar items in EconPapers)
JEL-codes: E31 E52 (search for similar items in EconPapers)
Date: 2006-07-04
New Economics Papers: this item is included in nep-cba, nep-eec, nep-geo, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
http://repec.org/sce2006/up.5654.1141119179.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sce:scecfa:338

Access Statistics for this paper

More papers in Computing in Economics and Finance 2006 from Society for Computational Economics Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F. Baum ().