Divergent Inflation Rates in EMU

Philip Lane and Patrick Honohan

Economic Papers from Trinity College Dublin, Economics Department

Abstract: We analyse the sources of divergent national inflation rates among EMU member countries. At one level, we review the Irish 'outlier' experience; at another, we estimate panel regressions for the 1999-2001 period. We highlight the role played by differential exposure to euro exchange rate movements in explaining inflation divergence. In addition, we find evidence that ouput gaps and a "price level convergence" effect have also been important. We draw some policy conclusions for the accession countries that are hoping to join EMU.

Date: 2003
New Economics Papers: this item is included in nep-eec, nep-ifn and nep-mon
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Citations: View citations in EconPapers (149)

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Journal Article: Divergent inflation rates in EMU (2003)
Working Paper: Divergent Inflation Rates in EMU (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:tcd:tcduee:20034

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