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Heterogeneity and convergence of regional inflation (prices)

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  • Nagayasu, Jun

Abstract

It is generally thought that members in a 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 the entire group of regions although there is some evidence of convergence in subgroups. These results suggest that diversified regional inflation can exist within a monetary union.

Suggested Citation

  • Nagayasu, Jun, 2011. "Heterogeneity and convergence of regional inflation (prices)," Journal of Macroeconomics, Elsevier, vol. 33(4), pages 711-723.
  • Handle: RePEc:eee:jmacro:v:33:y:2011:i:4:p:711-723
    DOI: 10.1016/j.jmacro.2011.07.002
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Nagayasu, Jun, 2014. "Regional inflation, spatial location and the Balassa-Samuelson effect," MPRA Paper 59220, University Library of Munich, Germany.
    2. Ikeno, Hidehiro, 2014. "Long-run analysis on convergence of Japanese local price levels: A pairwise approach," Economic Modelling, Elsevier, vol. 42(C), pages 390-397.
    3. Brown, M. & de Haas, R. & Sokolov, V., 2013. "Regional Inflation and Financial Dollarization," Discussion Paper 2013-073, Tilburg University, Center for Economic Research.
    4. Ikeno, Hidehiro, 2014. "Pairwise tests of convergence of Japanese local price levels," International Review of Economics & Finance, Elsevier, vol. 31(C), pages 232-248.
    5. Jun Nagayasu, 2017. "Regional inflation, spatial locations and the Balassa-Samuelson effect: Evidence from Japan," Urban Studies, Urban Studies Journal Limited, vol. 54(6), pages 1482-1499, May.
    6. repec:ebd:wpaper:163 is not listed on IDEAS
    7. Nagayasu, Jun, 2015. "Regional Inflation and Consumption Behaviors," MPRA Paper 68566, University Library of Munich, Germany.
    8. de Haas, R. & Brown, M. & Sokolov, V., 2015. "Regional Inflation, Financial Integration and Dollarization (This is a revision of CentER DP 2013-073)," Discussion Paper 2015-012, Tilburg University, Center for Economic Research.
    9. repec:mes:eaeuec:v:55:y:2017:i:3:p:261-276 is not listed on IDEAS
    10. Nagayasu, Jun, 2017. "Inflation and consumption of nontradable goods: Global implications from regional analyses," International Review of Economics & Finance, Elsevier, vol. 48(C), pages 478-491.
    11. Paweł Gajewski, 2017. "Sources of Regional Inflation in Poland," Eastern European Economics, Taylor & Francis Journals, vol. 55(3), pages 261-276, May.
    12. Nagayasu, Jun, 2012. "Regional inflation and industrial structure in monetary union," MPRA Paper 37310, University Library of Munich, Germany.

    More about this item

    Keywords

    Regional inflation; Monetary policy; Factor models; Convergence;

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • F3 - International Economics - - International Finance

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