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Inflation Convergence in the ERM: Evidence for Manufacturing and Services

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  • Mark Holmes

Abstract

Recent studies have concluded that the ERM has facilitated some degree of inflation convergence among its members with limited evidence of German leadership. These conclusions are based on national inflation measures which reflect aggregated output thereby masking different experiences at the sectoral level. This study examines inflation convergence in the ERM for manufacturing and service sector output using time-varying parameter analysis, common trends analysis and tests for weak exogeneity. For both sectors, there is no evidence of German leadership. Inflation convergence in manufacturing inflation, though limited, is more advanced than in services. [E3, F0, F4]

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  • Mark Holmes, 1998. "Inflation Convergence in the ERM: Evidence for Manufacturing and Services," International Economic Journal, Taylor & Francis Journals, vol. 12(3), pages 1-16.
    • Handle: RePEc:taf:intecj:v:12:y:1998:i:3:p:1-16
    DOI: 10.1080/10168739800000025
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    3. Giulio Palomba & Emma Sarno & Alberto Zazzaro, 2009. "Testing similarities of short-run inflation dynamics among EU-25 countries after the Euro," Empirical Economics, Springer, vol. 37(2), pages 231-270, October.
    4. Mentz, Markus & Sebastian, Steffen P., 2003. "Inflation convergence after the introduction of the Euro," CFS Working Paper Series 2003/30, Center for Financial Studies (CFS).
    5. A M Spiru, 2007. "Inflation convergence in the new EU member states," Working Papers 590260, Lancaster University Management School, Economics Department.
    6. Crowder, William J. & Phengpis, Chanwit, 2007. "A re-examination of international inflation convergence over the modern float," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 17(2), pages 125-139, April.
    7. Kang, Sang Hoon & Lahmiri, Salim & Uddin, Gazi Salah & Arreola Hernandez, Jose & Yoon, Seong-Min, 2020. "Inflation cycle synchronization in ASEAN countries," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 545(C).
    8. Consuelo Gámez Amián & Amalia Morales Zumaquero., 2002. "Complete or Partial Inflation Convergence in the EU?," Economic Working Papers at Centro de Estudios Andaluces E2002/09, Centro de Estudios Andaluces.
    9. Abdelghani, Echchabi & Osman, Sayid & Isares, Mahamad & Khalid, Sorhiran & Zulhilmi, Zulkifli, 2011. "The implementation of Gulf Dinar among the GCC member countries and its possible impacts," MPRA Paper 28245, University Library of Munich, Germany.
    10. Alina M. Spiru, 2008. "Inflation Convergence In Central And Eastern European Economies," Romanian Economic Business Review, Romanian-American University, vol. 3(4), pages 14-34, Winter.
    11. Bley, Jorg, 2009. "European stock market integration: Fact or fiction?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 19(5), pages 759-776, December.
    12. Giulio PALOMBA & Emma SARNO & Alberto ZAZZARO, 2007. "Testing similarities of short-run inflation dynamics among EU countries after the Euro," Working Papers 289, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    13. Alina M. Spiru, 2008. "Inflation Convergence In Central And Eastern European Economies," Journal of Information Systems & Operations Management, Romanian-American University, vol. 2(1), pages 289-316, July.

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