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The stability of the inflation rate in the Euro area: the role of Globalization and labour market

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  • Forte, Antonio

Abstract

In this paper I present a statistical analysis of some macroeconomic data that can shed more light on the causes of the low inflation rate that we registered in the Euro area during the last years. I focus on both the globalization and the labour market for their importance, as external and internal factor respectively, in influencing the domestic inflation. The main finding of this study, in which I also present an international comparison, is that the firms’ behaviour can help explain the stable trend of the inflation rate in the Euro area. This result can be interpreted as a signal of the redistribution, in favour of the firms, of the positive features of the globalization process

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 16587.

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Date of creation: 2009
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Handle: RePEc:pra:mprapa:16587

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Keywords: Inflation rate; Euro area; Exchange rate; Labour cost;

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References

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  1. Kenneth Rogoff, 2003. "Globalization and global disinflation," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 45-78.
  2. International Monetary Fund, 2005. "Inflation Targeting and Output Growth," IMF Working Papers 05/89, International Monetary Fund.
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  16. Issing, Otmar, 2001. "The Single Monetary Policy of the European Central Bank: One Size Fits All," International Finance, Wiley Blackwell, vol. 4(3), pages 441-62, Winter.
  17. Claudio E. V. Borio & Andrew Filardo, 2007. "Globalisation and inflation: New cross-country evidence on the global determinants of domestic inflation," BIS Working Papers 227, Bank for International Settlements.
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  19. Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
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Cited by:
  1. Antonio Forte, 2010. "The European Central Bank, the Federal Reserve and the Bank of England: Is the Taylor Rule a useful benchmark for the last decade?," Journal of Economics and Econometrics, Economics and Econometrics Research Institute (EERI), Brussels, vol. 53(2), pages 1-31.

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