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A Comparative Analysis Of Real And Predicted Inflation Convergence In Cee Countries During The Economic Crisis

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  • Mihaela Simionescu

    () (Institute for Economic Forecasting of the Romanian Academy, Romania)

Abstract

The main objective of this study is to make a comparative analysis of inflation convergence in Central-Eastern European countries (CEE countries) during the economic crisis over 2008-2013. For Bulgaria, Czech Republic, Hungary, Poland, Romania and Slovakia the inflation convergence has decreased in the analyzed period, the coefficient of variation (64.22%) showing strong divergence compared to the slow divergence indirectly predicted by the European Commission. The negative catch-up rates for Bulgaria, Poland and Slovakia explain the large negative consequences of the actual economic crisis for these countries. The Fisher-type test for panel data indicated no convergence for real and predicted inflation convergence. The analysis based on random effects models indicated an inflation convergence rate of 15.47% in CEE economies compared to a predicted convergence rate of 2.04%.

Suggested Citation

  • Mihaela Simionescu, 2014. "A Comparative Analysis Of Real And Predicted Inflation Convergence In Cee Countries During The Economic Crisis," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 6(2), pages 142-155, July.
  • Handle: RePEc:jes:wpaper:y:2014:v:6:i:2:p:142-155
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    File URL: http://www.ceswp.uaic.ro/articles/CESWP2014_VI2_SIM.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    convergence; forecasts; accuracy; catch-up rate; panel unit root test Romania;

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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