Heterogeneity and convergence of regional inflation (prices)
AbstractIt is generally thought that members in a monetary union experience a similar level of inflation. This paper verifies this conventional belief. Using regional data, we present statistical evidence of heterogeneous inflation in Japan. Not only does the average inflation differ significantly across regions, but regional inflation responds differently to common economic and monetary factors. Furthermore, we show no evidence of price convergence in the entire group of regions although there is some evidence of convergence in subgroups. These results suggest that diversified regional inflation can exist within a monetary union.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Macroeconomics.
Volume (Year): 33 (2011)
Issue (Month): 4 ()
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Web page: http://www.elsevier.com/locate/inca/622617
Regional inflation; Monetary policy; Factor models; Convergence;
Find related papers by JEL classification:
- E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
- F3 - International Economics - - International Finance
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