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Regional Inflation (Price) Behaviors: Heterogeneity and Convergence

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  • Nagayasu, Jun

Abstract

It is generally thought that members in monetary union experience a similar level of inflation. This paper verifies this conventional belief. Using regional data, we present statistical evidence of heterogeneous inflation in Japan. Not only does the average inflation differ significantly across regions, but regional inflation responds differently to common economic and monetary factors. Furthermore, we show no evidence of price convergence in a group of entire regions although there is some evidence of convergence in subgroups. These results suggest that diversified regional inflation can exist within monetary union.

Suggested Citation

  • Nagayasu, Jun, 2010. "Regional Inflation (Price) Behaviors: Heterogeneity and Convergence," MPRA Paper 25430, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:25430
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    References listed on IDEAS

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    Cited by:

    1. Nagayasu, Jun, 2010. "Domestic Capital Mobility: A Panel Data Approach," MPRA Paper 27720, University Library of Munich, Germany.
    2. Jun Nagayasu, 2013. "A dynamic factor approach to domestic capital mobility," Empirical Economics, Springer, vol. 44(2), pages 685-700, April.

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    More about this item

    Keywords

    Regional inflation; monetary policy; factor models; convergence;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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