Inflation differentials in EMU: what can we learn from the time series evidence?
This note discusses whether the inflation process in Portugal, Ireland, Greece and Spain - countries that after the launch of the euro experienced national inflation rates above the weighted average of the EMU- has different time series properties from the EMU average and explains the possible implications of inflation differentials for the union and the national governments of member-countries. We find that the inflation differentials in Greece, Portugal and Spain are a long-run phenomenon which leads to a continuous real exchange appreciation. We interpret this as evidence for the debt problems that have arisen over the last two years in euro area.
Volume (Year): 31 (2011)
Issue (Month): 3 ()
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- Uhlig, H.F.H.V.S., 2002. "One Money, But Many Fiscal Policies in Europe : What are the Consequences?," Discussion Paper 2002-32, Tilburg University, Center for Economic Research.
- Angeloni, Ignazio & Ehrmann, Michael, 2004.
"Euro area inflation differentials,"
Working Paper Series
0388, European Central Bank.
- Christophe Schalck, 2011. "The European fiscal framework: What lessons can we learn from the crisis?," Economics Bulletin, AccessEcon, vol. 31(1), pages 358-366.
- repec:ebl:ecbull:v:5:y:2006:i:9:p:1-11 is not listed on IDEAS
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