Inflation Dynamics in the New EU Member States: How Relevant Are External Factors?
AbstractIn this paper we evaluate the relative influence of external versus domestic inflation drivers in the 12 new European Union (EU) member countries. Our empirical analysis is based on the New Keynesian Phillips Curve (NKPC) derived in Gali and Monacelli (2005) for small open economies (SOE). Employing the Generalized Method of Moments (GMM), we find that the SOE NKPC is well supported in the new EU member states. We also find that the inflation process is dominated by domestic variables in the larger countries of our sample, whereas external variables are mostly relevant in the smaller countries.
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Bibliographic InfoPaper provided by Henley Business School, Reading University in its series Economics & Management Discussion Papers with number em-dp2010-04.
Length: 23 pages
Date of creation: 09 May 2010
Date of revision:
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New Keynesian Phillips Curve; small open economies; inflation dynamics; new EU member countries; GMM estimation;
Other versions of this item:
- Alexander Mihailov & Fabio Rumler & Johann Scharler, 2011. "Inflation Dynamics in the New EU Member States: How Relevant Are External Factors?," Review of International Economics, Wiley Blackwell, vol. 19(1), pages 65-76, 02.
- Alexander Mihailov & Fabio Rumler & Johann Scharler, 2009. "Inflation Dynamics in the New EU Member States: How Relevant Are External Factors?," Economics working papers 2009-13, Department of Economics, Johannes Kepler University Linz, Austria.
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- P22 - Economic Systems - - Socialist Systems and Transition Economies - - - Prices
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-29 (All new papers)
- NEP-CBA-2010-05-29 (Central Banking)
- NEP-EEC-2010-05-29 (European Economics)
- NEP-MON-2010-05-29 (Monetary Economics)
- NEP-OPM-2010-05-29 (Open Economy Macroeconomics)
- NEP-TRA-2010-05-29 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Alexander Mihailov & Fabio Rumler & Johann Scharler, 2008. "The Small Open-Economy New Keynesian Phillips Curve: Empirical Evidence and Implied Inflation Dynamics," Economics working papers 2008-17, Department of Economics, Johannes Kepler University Linz, Austria.
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