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Intercountry Differences in the Relationship between Relative Price Variability and Average Prices

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  • Mick Silver
  • Christos Ioannidis

Abstract

This paper provides new evidence on the relationship between relative price variability and inflation. The model uses a consistently defined data set for nine European countries. It benefits from the inclusion and testing of the effects of macroeconomic variables and the incorporation into the measures of inflation and dispersion adjustments for timeliness, appropriate formulas, and proximity. The general findings of an effect on relative price variability by the macroeconomic environment and negative coefficients on unexpected inflation are supported by their occurrence in models estimated by seemingly unrelated regression and a robust systems estimator.

Suggested Citation

  • Mick Silver & Christos Ioannidis, 2001. "Intercountry Differences in the Relationship between Relative Price Variability and Average Prices," Journal of Political Economy, University of Chicago Press, vol. 109(2), pages 355-374, April.
    • Handle: RePEc:ucp:jpolec:v:109:y:2001:i:2:p:355-374
    DOI: 10.1086/319555
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    References listed on IDEAS

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