How far from the Euro Area? Measuring convergence of inflation rates in Eastern Europe
AbstractWe present a common factor framework of convergence which we implement using principal components analysis. We apply this technique to a dataset of monthly inflation rates of EMU and the Eastern European New Member Countries (NMC) over 1996-2007. In the earlier years, the NMC rates moved independently from an average of the three best performing countries over the past twelve months, while they moved somewhat closer in line with them in the later years. Looking at the sample of the EMU and NMC countries as a whole, there is evidence of a formation of convergence clubs across the two groups.
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Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 26 (2009)
Issue (Month): 4 (July)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/30411
Convergence Inflation rates European Monetary Union Principal components analysis;
Other versions of this item:
- Bettina Becker & Stephen G. Hall, 2009. "How Far From the Euro Area? Measuring Convergence of Inflation Rates in Eastern Europe," Discussion Papers in Economics 09/1, Department of Economics, University of Leicester.
- Bettina Becker & Stephen G. Hall, 2009. "How Far From the Euro Area? Measuring Convergence of Inflation Rates in Eastern Europe," Discussion Paper Series 2009_05, Department of Economics, Loughborough University, revised Mar 2009.
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- F31 - International Economics - - International Finance - - - Foreign Exchange
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