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Why has inflation in the European Union stopped converging?

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  • Buli­r, Ales
  • Hurni­k, Jaromi­r

Abstract

The dispersion of European Union inflation rates drifted upward in recent years, after the drive toward the euro pushed it downward sharply in the late 1990s and early 2000s. Inflation accelerated in economies that have either grown faster than their potential output or have failed to liberalize their factor and product markets, generating cost-push pressures and monetary transmission inefficiencies. To the extent inflation performance has been affected by factors outside of the control of the European Central Bank stabilization of inflation around a euro-area target will remain an elusive goal.

Suggested Citation

  • Buli­r, Ales & Hurni­k, Jaromi­r, 2008. "Why has inflation in the European Union stopped converging?," Journal of Policy Modeling, Elsevier, vol. 30(2), pages 341-347.
    • Handle: RePEc:eee:jpolmo:v:30:y:2008:i:2:p:341-347
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    References listed on IDEAS

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    1. Alena Bicakova & Kamil Dybczak & Ales Krejdl & Jiri Slacalek & Michal Slavik, 2007. "CNB Economic Research Bulletin: Fiscal Policy and its Sustainability," Occasional Publications - Edited Volumes, Czech National Bank, edition 2, volume 5, number rb05/2 edited by Ian Babetskii & Vladimir Bezdek, January.
    2. Beirne, John & Bijsterbosch, Martin, 2011. "Exchange rate pass-through in central and eastern European EU Member States," Journal of Policy Modeling, Elsevier, vol. 33(2), pages 241-254, March.
    3. Égert, Balázs, 2011. "Catching-up and inflation in Europe: Balassa-Samuelson, Engel's Law and other culprits," Economic Systems, Elsevier, vol. 35(2), pages 208-229, June.
    4. Ian Babetskii & Ales Bulir & Fabrizio Coricelli & Jan Filacek & Michal Franta & Roman Horvath & Branislav Saxa & Katerina Smidkova, 2008. "CNB Economic Research Bulletin: Ten Years of Inflation Targeting," Occasional Publications - Edited Volumes, Czech National Bank, edition 1, volume 6, number rb06/1 edited by Ian Babetskii & Katerina Smidkova, January.

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