Inflation and Output Comovement in the Euro Area
AbstractThis paper discusses comovement between inflation and output in the euro area. The strength of the comovement may not be apparent at first sight, but is clear at business cycle frequencies. Our results suggest that at business cycle frequency, the output and core inflation comovement is high and stable, and that inflation lags the cycle in output with roughly half of its variance. The strong relationship of output and inflation hints at the importance of demand shocks for the euro area business cycle.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 13/192.
Date of creation: 11 Sep 2013
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-02 (All new papers)
- NEP-CBA-2013-10-02 (Central Banking)
- NEP-EEC-2013-10-02 (European Economics)
- NEP-MON-2013-10-02 (Monetary Economics)
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