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Regional inflation and industrial structure in monetary union

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  • Nagayasu, Jun

Abstract

It is often argued that an optimal currency area requires homogeneous regional inflation. However, previous empirical studies point out heterogeneity in sectoral inflation and geographical concentration of industries within a monetary union. It follows that there must be a difference in regional inflation in such a union. We examine this view using regional data from Japan which has experienced a period of rapid change in industrial structure, and show that economic structure is closely related to heterogeneous regional inflation. This study suggests that heterogeneous inflation can be a prevailing and long-lasting phenomenon in a monetary union.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 37310.

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Date of creation: 01 Mar 2012
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Handle: RePEc:pra:mprapa:37310

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Keywords: Regional inflation; Monetary union; Optimal currency area; Industrial structure;

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Cited by:
  1. Angelos Liontakis & Dimitris Kremmydas, 2013. "Food Inflation in EU: Distribution Analysis and Spatial Effects," Working Papers 2013-3, Agricultural University of Athens, Department Of Agricultural Economics.

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