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Inflation Bias after the Euro: Evidence from the UK and Italy

Author

Listed:
  • Giancarlo Marini

    (University of Rome II - Faculty of Economics)

  • Alessandro Piergallini

    (University of Rome II)

  • Pasquale Scaramozzino

    (University of Rome II - Faculty of Economics
    University of London - School of Oriental and African Studies (SOAS))

Abstract

This paper presents an indirect approach to investigate the possible existence of measurement error bias in the Harmonized Index of Consumer Prices for the UK and Italy. Our empirical results show that there is no significant evidence for a bias in the UK, nor for Italy prior to the introduction of the Euro. Since January 2002, however, the inflation rate in Italy has been underestimated by at least 6 percentage points.

Suggested Citation

  • Giancarlo Marini & Alessandro Piergallini & Pasquale Scaramozzino, 2004. "Inflation Bias after the Euro: Evidence from the UK and Italy," CEIS Research Paper 60, Tor Vergata University, CEIS.
    • Handle: RePEc:rtv:ceisrp:60
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    Cited by:

    1. Guglielmo Maria Caporale & Alessandro Girardi & Marco Ventura, 2012. "The euro changeover and price adjustments in Italy," Applied Economics Letters, Taylor & Francis Journals, vol. 19(4), pages 379-382, March.
    2. Antonio Filippin & Luca Nunziata, 2019. "Monetary effects of inequality: lessons from the euro experiment," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(2), pages 99-124, June.
    3. Jacek Białek & Elżbieta Roszko-Wójtowicz, 2021. "Dynamics of price level changes in the Visegrad group: comparative study," Quality & Quantity: International Journal of Methodology, Springer, vol. 55(1), pages 357-384, February.
    4. Raghubir, Priya, 2006. "An information processing review of the subjective value of money and prices," Journal of Business Research, Elsevier, vol. 59(10-11), pages 1053-1062, October.
    5. repec:ebl:ecbull:v:1:y:2008:i:3:p:1-9 is not listed on IDEAS
    6. Aleksandra Hałka & Agnieszka Leszczyńska, 2011. "Wady i zalety wskaźnika cen towarów i usług konsumpcyjnych – szacunki obciążenia," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 9, pages 51-75.
    7. Krystian Mucha, 2010. "Czynniki wyjaśniające zjawisko luki percepcji wśród konsumentów w okresie przyjmowania euro," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1-2, pages 67-87.
    8. Agnieszka Leszczynska & Aleksandra Halka, 2012. "What does the Consumer Price Index Measure? Bias Estimates for Poland," EcoMod2012 4370, EcoMod.
    9. Fabrizio Balli & Silvia Tiezzi, 2010. "Equivalence scales, the cost of children and household consumption patterns in Italy," Review of Economics of the Household, Springer, vol. 8(4), pages 527-549, December.
    10. Raghubir, Priya & Morwitz, Vicki G. & Santana, Shelle, 2012. "Europoly Money: How Do Tourists Convert Foreign Currencies to Make Spending Decisions?," Journal of Retailing, Elsevier, vol. 88(1), pages 7-19.
    11. Raitano, Michele & Fantozzi, Roberto, 2015. "Political cycle and reported labour incomes in Italy: Quasi-experimental evidence on tax evasion," European Journal of Political Economy, Elsevier, vol. 39(C), pages 269-280.
    12. Giam Pietro Cipriani & Angelo Zago & Diego Lubian, 2008. "Money Illusion: Are Economists Different?," Economics Bulletin, AccessEcon, vol. 1(3), pages 1-9.

    More about this item

    Keywords

    Inflation; Measurement bias;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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