Advanced Search
MyIDEAS: Login to save this article or follow this journal

Money Financed Deficits, Central Bank Reform and Inflation Persistence:Evidence from Selected European Countries

Contents:

Author Info

  • Athanasios P. Papadopoulos

    (University of Crete, Department of Economics, Rethymno, Greece)

  • Moise G. Sidiropoulos

    (University Louis Pasteur of Strasbourg and BETA-Theme, France)

Abstract

This paper develops an inflation persistence model and provides theoretical arguments that low inflation persistence may be achieved either by a central bank reform or by a hard pegging exchange rate vis-\`{a}-vis a low inflation country. Our theoretical analysis states that both the decrease in the monetary financing of the budget deficit (or the economic independence of the central bank) and the hard pegging of the exchange rate lead to a fall in the inflation persistence. These arguments are supported by empirical evidence provided by five selected European countries: Greece, Italy, Portugal, Spain and France. In this paper the most likely date for the change in the policy regime is detected by a procedure based upon the recent work of Perron (1997), where the null hypothesis of a unit root is set against the alternative of stationarity about a single broken trend line. Our results confirm that central bank reform significantly affects the inflation persistence in the countries under examination.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Article provided by Cyprus Economic Society and University of Cyprus in its journal Ekonomia.

Volume (Year): 7 (2004)
Issue (Month): 1 (Summer)
Pages: 1-17

as in new window
Handle: RePEc:ekn:ekonom:v:7:y:2004:i:1:p:1-17

Contact details of provider:
Web page: http://www.ekonomia.ucy.ac.cy/
More information through EDIRC

Related research

Keywords:

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ekn:ekonom:v:7:y:2004:i:1:p:1-17. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Managing Editor).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.