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Inflation Convergence in the ERM: Evidence for Manufacturing and Services

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  • Mark Holmes

Abstract

Recent studies have concluded that the ERM has facilitated some degree of inflation convergence among its members with limited evidence of German leadership. These conclusions are based on national inflation measures which reflect aggregated output thereby masking different experiences at the sectoral level. This study examines inflation convergence in the ERM for manufacturing and service sector output using time-varying parameter analysis, common trends analysis and tests for weak exogeneity. For both sectors, there is no evidence of German leadership. Inflation convergence in manufacturing inflation, though limited, is more advanced than in services. [E3, F0, F4]

Suggested Citation

  • Mark Holmes, 1998. "Inflation Convergence in the ERM: Evidence for Manufacturing and Services," International Economic Journal, Taylor & Francis Journals, vol. 12(3), pages 1-16.
  • Handle: RePEc:taf:intecj:v:12:y:1998:i:3:p:1-16 DOI: 10.1080/10168739800000025
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    Cited by:

    1. A M Spiru, 2007. "Inflation convergence in the new EU member states," Working Papers 590260, Lancaster University Management School, Economics Department.
    2. Alina M. Spiru, 2008. "Inflation Convergence In Central And Eastern European Economies," Romanian Economic Business Review, Romanian-American University, vol. 3(4), pages 14-34, Winter.
    3. Pawel GAJEWSKI & Jakub KOWALSKI, "undated". "Price Convergence in the European Union Countries," EcoMod2004 330600057, EcoMod.
    4. Bley, Jorg, 2009. "European stock market integration: Fact or fiction?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 19(5), pages 759-776, December.
    5. Salvador Gil-Pareja & Simón Sosvilla-Rivero, 2004. "Export market integration in the European Union," Journal of Applied Economics, Universidad del CEMA, vol. 7, pages 271-301, November.
    6. Giulio Palomba & Emma Sarno & Alberto Zazzaro, 2009. "Testing similarities of short-run inflation dynamics among EU-25 countries after the Euro," Empirical Economics, Springer, pages 231-270.
    7. Giulio PALOMBA & Emma SARNO & Alberto ZAZZARO, 2007. "Testing similarities of short-run inflation dynamics among EU countries after the Euro," Working Papers 289, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    8. Crowder, William J. & Phengpis, Chanwit, 2007. "A re-examination of international inflation convergence over the modern float," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 17(2), pages 125-139, April.
    9. Consuelo Gámez Amián & Amalia Morales Zumaquero., 2002. "Complete or Partial Inflation Convergence in the EU?," Economic Working Papers at Centro de Estudios Andaluces E2002/09, Centro de Estudios Andaluces.
    10. Alina M. Spiru, 2008. "Inflation Convergence In Central And Eastern European Economies," Journal of Information Systems & Operations Management, Romanian-American University, vol. 2(1), pages 289-316, July.
    11. Abdelghani, Echchabi & Osman, Sayid & Isares, Mahamad & Khalid, Sorhiran & Zulhilmi, Zulkifli, 2011. "The implementation of Gulf Dinar among the GCC member countries and its possible impacts," MPRA Paper 28245, University Library of Munich, Germany.
    12. Mentz, Markus & Sebastian, Steffen P., 2003. "Inflation convergence after the introduction of the Euro," CFS Working Paper Series 2003/30, Center for Financial Studies (CFS).

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