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Forces Driving Inflation in the New EU10 Members

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Author Info
Emil Stavrev

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Abstract

The paper analyzes the forces driving inflation in the new EU10 member countries. A significant part of headline inflation in these countries is due to common factors, such as price level convergence and EU integration. However, idiosyncratic factors have also played a role in the inflation process. These factors are related to the country-specific financial conditions, pass-through from foreign prices, and demand-supply situation in each country, although administered price adjustments and increases of indirect taxes associated with EU accession are also likely to have played a role.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 09/51.

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Length: 16 pages
Date of creation: 19 Mar 2009
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Handle: RePEc:imf:imfwpa:09/51

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Related research
Keywords: Inflation ; European Union ; Economic integration ; Economic models ; Cross country analysis ;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
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  1. Franziska Ohnsorge & Nada Choueiri & Rachel van Elkan, 2008. "Inflation Differentials in the EU: A Common ( Factors ) Approach with Implications for EU8 Euro Adoption Prospects," IMF Working Papers 08/21, International Monetary Fund. [Downloadable!]
  2. Ashoka Mody & Franziska Ohnsorge, 2007. "Can Domestic Policies Influence Inflation?," IMF Working Papers 07/257, International Monetary Fund. [Downloadable!]
  3. Quah, Danny & Vahey, Shaun P, 1995. "Measuring Core Inflation?," Economic Journal, Royal Economic Society, vol. 105(432), pages 1130-44, September. [Downloadable!] (restricted)
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  4. Jushan Bai & Serena Ng, 2002. "Determining the Number of Factors in Approximate Factor Models," Econometrica, Econometric Society, vol. 70(1), pages 191-221, January. [Downloadable!] (restricted)
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This page was last updated on 2009-11-20.


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