Food Inflation in EU: Distribution Analysis and Spatial Effects
AbstractIn the European Union homogenous inflation forces are expected to prevail due to the increased economic integration, especially after the creation of the single currency area. This expectation is directly related to the issue of inflation convergence which has gained increasing attention by both academia and policy makers in Europe. While the examination of the core inflation is of great importance for macroeconomic policy, the prominent role of disaggregate inflation indices and especially food inflation has been also frequently emphasized in the literature. However, the issue of food inflation convergence has been largely ignored in empirical studies. This study explores the evolving distribution of the food inflation rates in the EU-25 member states, using the distribution dynamics analysis and covering the period from January 1997 to March 2011. This analysis rests on the assumption that each country represents an independent observation which provides unique information that can be used to estimate the transition dynamics of inflation. However, we show that inside EU-25, spatial autocorrelation prevails and therefore, the independency assumption is violated. To insure spatial independence, the Getis spatial filter is implemented prior to the distribution dynamics analysis. The results of the analysis confirm the existence of convergence trends which are even more clear after the spatial filtering procedure, indicating, on the one hand, the influence of spatial effects on food inflation and, on the other hand, the effectiveness of Getis spatial filtering.
Download InfoTo 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 InfoPaper provided by Agricultural University of Athens, Department Of Agricultural Economics in its series Working Papers with number 2013-3.
Length: 28 Pages
Date of creation: 2013
Date of revision:
European Union; inflation; convergence; spatial filtering;
Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-07-05 (Agricultural Economics)
- NEP-ALL-2013-07-05 (All new papers)
- NEP-EEC-2013-07-05 (European Economics)
- NEP-EUR-2013-07-05 (Microeconomic European Issues)
- NEP-GEO-2013-07-05 (Economic Geography)
- NEP-MAC-2013-07-05 (Macroeconomics)
- NEP-URE-2013-07-05 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Filippo Altissimo & Pierpaolo Benigno & Diego Rodriguez Palenzuela, 2005.
"Long-Run Determinants of Inflation Differentials in a Monetary Union,"
NBER Working Papers
11473, National Bureau of Economic Research, Inc.
- Altissimo, Filippo & Benigno, Pierpaolo & Rodriguez Palenzuela, Diego, 2005. "Long-Run Determinants of Inflation Differentials in a Monetary Union," CEPR Discussion Papers 5149, C.E.P.R. Discussion Papers.
- Sergio J. Rey & Mark V. Janikas, 2005. "Regional convergence, inequality, and space," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 155-176, April.
- Danny Quah, 1992.
"Empirical cross-section dynamics in economic growth,"
Discussion Paper / Institute for Empirical Macroeconomics
75, Federal Reserve Bank of Minneapolis.
- Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
- Danny Quah, 1992. "Empirical Cross-Section Dynamics in Economic Growth," FMG Discussion Papers dp154, Financial Markets Group.
- Andrea Vaona & Guido Ascari, 2012.
"Regional Inflation Persistence: Evidence from Italy,"
Taylor & Francis Journals, vol. 46(4), pages 509-523, June.
- Andrea Vaona & Guido Ascari, 2010. "Regional Inflation Persistence: Evidence from Italy," Working Papers 04/2010, University of Verona, Department of Economics.
- Andrea Vaona & Guido Ascari, 2008. "Regional Inflation Persistence: Evidence from Italy," Quaderni della facoltÃ di Scienze economiche dell'UniversitÃ di Lugano 0807, USI Università della Svizzera italiana.
- Lopez, Claude & Papell, David, 2010.
"Are euro area inflation rates misaligned?,"
27929, University Library of Munich, Germany.
- Lopez, C. & Papell, David H., 2011. "Convergence of Euro Area Inflation Rates," Working papers 326, Banque de France.
- Lopez, Claude & Papell, David, 2010. "Testing for Group-Wise Convergence with an Application to Euro Area Inflation," MPRA Paper 20585, University Library of Munich, Germany.
- Cavallero, Alessandro, 2011. "The convergence of inflation rates in the EU-12 area: A distribution dynamics approach," Journal of Macroeconomics, Elsevier, vol. 33(2), pages 341-357, June.
- Maza, Adolfo & Hierro, María & Villaverde, José, 2012. "Income distribution dynamics across European regions: Re-examining the role of space," Economic Modelling, Elsevier, vol. 29(6), pages 2632-2640.
- Claude Lopez & David H. Papell, 2008. "Testing for Group-Wise Convergence with an Application to Euro Area Inflation," University of Cincinnati, Economics Working Papers Series 2010-03, University of Cincinnati, Department of Economics, revised 2010.
- Steven N. Durlauf & Danny T. Quah, 1998.
"The New Empirics of Economic Growth,"
98-01-012, Santa Fe Institute.
- S Durlauf & Danny Quah, 1998. "The New Empirics of Economic Growth," CEP Discussion Papers dp0384, Centre for Economic Performance, LSE.
- Durlauf,S.N. & Quah,D.T., 1998. "The new empirics of economic growth," Working papers 3, Wisconsin Madison - Social Systems.
- Steven N. Durlauf & Danny T. Quah, 1998. "The New Empirics of Economic Growth," NBER Working Papers 6422, National Bureau of Economic Research, Inc.
- Giuseppe Arbia & Roberto Basile & Gianfranco Piras, 2006. "Analyzing Intra-Distribution Dynamics: A Reappraisal," ERSA conference papers ersa06p262, European Regional Science Association.
- Kutan, Ali M. & Yigit, Taner M., 2005. "Real and nominal stochastic convergence: Are the new EU members ready to join the Euro zone?," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 387-400, June.
- Yilmazkuday, Hakan, 2009. "Inflation Targeting and Inflation Convergence within Turkey," MPRA Paper 16770, University Library of Munich, Germany.
- Zaffaroni, Paolo, 2004. "Contemporaneous aggregation of linear dynamic models in large economies," Journal of Econometrics, Elsevier, vol. 120(1), pages 75-102, May.
- Ajit Dayanandan & Mukesh Ralhan, 2005. "Price Index Convergence Among Provinces and Cities of Canada: 1978 - 2001," Econometrics Working Papers 0504, Department of Economics, University of Victoria.
- Thibault Laurent & Anne Ruiz-Gazen & Christine Thomas-Agnan, .
"GeoXp: An R Package for Exploratory Spatial Data Analysis,"
Journal of Statistical Software,
American Statistical Association, vol. 47(i02).
- Laurent, Thibault & Ruiz-Gazen, Anne & Thomas-Agnan, Christine, 2009. "GeoXp: An R Package for Exploratory Spatial Data Analysis," TSE Working Papers 09-099, Toulouse School of Economics (TSE).
- Ailenei, Dorel & Cristescu, Amalia, 2010. "Regional Distribution of Inflationary Pressures in Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 32-43, December.
- Beck, Günter W. & Hubrich, Kirstin & Marcellino, Massimiliano, 2006.
"Regional inflation dynamics within and across euro area countries and a comparison with the US,"
Working Paper Series
0681, European Central Bank.
- Beck, Günter W. & Hubrich, Kirstin & Marcellino, Massimiliano, 2006. "Regional inflation dynamics within and across euro area countries and a comparison with the US," CFS Working Paper Series 2007/01, Center for Financial Studies (CFS).
- Roberts, John M, 2006.
"Monetary Policy and Inflation Dynamics,"
812, University Library of Munich, Germany.
- Busetti, Fabio & Forni, Lorenzo & Harvey, Andrew & Venditti, Fabrizio, 2006.
"Inflation convergence and divergence within the European Monetary Union,"
Working Paper Series
0574, European Central Bank.
- Fabio Busetti & Lorenzo Forni & Andrew Harvey & Fabrizio Venditti, 2007. "Inflation Convergence and Divergence within the European Monetary Union," International Journal of Central Banking, International Journal of Central Banking, vol. 3(2), pages 95-121, June.
- Hiranya Nath & Kiril Tochkov, 2010. "Relative Inflation Dynamics in the EU Accession Countries of Central and Eastern Europe," Working Papers 1005, Sam Houston State University, Department of Economics and International Business.
- Olivier Peron & Serge Rey, 2012. "Trade and convergence of per capita income in the Indian Ocean Zone, 1950–2008," The Annals of Regional Science, Springer, vol. 49(3), pages 657-683, December.
- Jan-Egbert Sturm & Ulrich Fritsche & Michael Graff & Michael Lamla & Sarah Lein & Volker Nitsch & David Liechti & Daniel Triet, 2009. "The euro and prices: changeover-related inflation and price convergence in the euro area," European Economy - Economic Papers 381, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Kocenda, Evzen & Papell, David H, 1997. "Inflation Convergence within the European Union: A Panel Data Analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 2(3), pages 189-98, July.
- Mark Holmes, 2002. "Panel data evidence on inflation convergence in the European Union," Applied Economics Letters, Taylor & Francis Journals, vol. 9(3), pages 155-158.
- Stephen G. Cecchetti & Nelson C. Mark & Robert J. Sonora, 2002. "Price Index Convergence Among United States Cities," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1081-1099, November.
- Nagayasu, Jun, 2012. "Regional inflation and industrial structure in monetary union," MPRA Paper 37310, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kremmydas dimitrios).
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.