Regional Price Adjustment in a Monetary Union

Jan Marc Berk () and Job Swank
Additional contact information
Jan Marc Berk: The Netherlands Bank, and Vrije Universiteit, Amsterdam
Job Swank: The Netherlands Bank, Amsterdam, and Erasmus University Rotterdam

No 02-077/2, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Using a New-Keynesian framework, we investigate how far the inflationary processes in member states of EMU cause regional price levels to converge. We fail to produce hard evidence of the present existence of such an adjustment mechanism, notwithstanding that inflation in some countries tends to converge towards the euro area level. Overa11, inflation persistence has declined significantly over the years, but there are still marked differences between countries on this score. We conclude that the euro area is not an optimal currency area yet, lending support to the quest for further structura1 reforms in European labour and product markets.

Keywords: Inflation; EMU; monetary policy. (search for similar items in EconPapers)
JEL-codes: E31 E58 F02 (search for similar items in EconPapers)
Date: 2002-08-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://papers.tinbergen.nl/02077.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:tin:wpaper:20020077

Access Statistics for this paper

More papers in Tinbergen Institute Discussion Papers from Tinbergen Institute Contact information at EDIRC.
Bibliographic data for series maintained by Tinbergen Office +31 (0)10-4088900 ().