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Productivity growth and inflation in Europe: Evidence from panel cointegration tests

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  • Dimitris K. Christopoulos

    ()

  • Efthymios G. Tsionas

    ()

Abstract

In this paper we investigate the productivity growth – inflation nexus in fifteen European countries over the period 1961–1999 using panel unit root and panel cointegration tests. Emphasis is placed on the distinction between long-run and short-run causality using recently developed tests appropriate for heterogeneous panel. The empirical results are relevant for the role of the EMU and the Treaty of Maastricht in catching up, real convergence, and the future growth prospects of Europe. The policy implications of the findings are discussed in detail. Copyright Springer-Verlag 2005

Suggested Citation

  • Dimitris K. Christopoulos & Efthymios G. Tsionas, 2005. "Productivity growth and inflation in Europe: Evidence from panel cointegration tests," Empirical Economics, Springer, vol. 30(1), pages 137-150, January.
  • Handle: RePEc:spr:empeco:v:30:y:2005:i:1:p:137-150
    DOI: 10.1007/s00181-004-0227-3
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Nicolaas Groenewold & James E.H. Paterson, 2013. "Stock Prices and Exchange Rates in Australia: Are Commodity Prices the Missing Link?," Australian Economic Papers, Wiley Blackwell, vol. 52(3-4), pages 159-170, December.
    2. Saten Kumar & Don J. Webber & Geoff Perry, 2009. "Real wages, inflation and labour productivity in Australia," Working Papers 0921, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    3. Nagayasu, Jun, 2009. "Regional Inflation in China," MPRA Paper 24722, University Library of Munich, Germany.
    4. Saten Kumar & Don J. Webber & Geoff Perry, 2012. "Real wages, inflation and labour productivity in Australia," Applied Economics, Taylor & Francis Journals, vol. 44(23), pages 2945-2954, August.
    5. Chor Foon Tang, 2014. "The effect of real wages and inflation on labour productivity in Malaysia," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(3), pages 311-322, May.

    More about this item

    Keywords

    Productivity; inflation; panel unit roots; panel cointegration; European Monetary Union; convergence; C22; C23; O40; E30;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)

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