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Convergence of Inflation rates during Flexible Exchange Rate Period

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Author Info
Kausik Chaudhuri (Indira Gandhi Institute of Development Research, Santosh Nagar, Gen. A. K. Vaidya Marg (Film City Road), Goregaon (East), Mumbai-400065, India)

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Abstract

This paper examines the international convergence of inflation rates during the flexible rate period of eighteen OECD countries. Using individual country data, we find evidence of nonstationarity in most cases. The results are different in the case of the panel data model. Though, we can strongly reject the unit root hypothesis of a panel of eighteen countries, the evidence in favor of stationarity is less in case of countries in the European community or in case of EMS countries.

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Publisher Info
Article provided by Department of Economics, Delhi School of Economics in its journal Indian Economic Review.

Volume (Year): 37 (2002)
Issue (Month): 1 (January)
Pages: 59-68
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Handle: RePEc:dse:indecr:v:37:y:2002:i:1:p:59-68

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Related research
Keywords: Panel data Unit root Inflation European Monetary System

Find related papers by JEL classification:
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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