Regional Inflation (Price) Behaviors: Heterogeneity and Convergence
AbstractIt is generally thought that members in monetary union experience a similar level of inflation. This paper verifies this conventional belief. Using regional data, we present statistical evidence of heterogeneous inflation in Japan. Not only does the average inflation differ significantly across regions, but regional inflation responds differently to common economic and monetary factors. Furthermore, we show no evidence of price convergence in a group of entire regions although there is some evidence of convergence in subgroups. These results suggest that diversified regional inflation can exist within monetary union.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 25430.
Date of creation: Sep 2010
Date of revision:
Regional inflation; monetary policy; factor models; convergence;
Find related papers by JEL classification:
- F3 - International Economics - - International Finance
- E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-02 (All new papers)
- NEP-CBA-2010-10-02 (Central Banking)
- NEP-GEO-2010-10-02 (Economic Geography)
- NEP-MAC-2010-10-02 (Macroeconomics)
- NEP-MON-2010-10-02 (Monetary Economics)
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