IDEAS home Printed from https://ideas.repec.org/a/eas/econst/v25y2024i25p1-11.html
   My bibliography  Save this article

Inflation Convergence In Fragile Five Countries: Evidence From Rals-Lm Unit Root Tests

Author

Listed:
  • Özlem GöktaÅŸ

    (Ä°stanbul Ãœniveristesi)

Abstract

The aim of this study is to investigate whether or not inflation convergence exists in the Fragile Five countries that are Brazil, Indonesia, South Africa, India, and Turkey. We collect monthly consumer price indices of the Fragile Five countries for the period 1995,1-2023,12. The inflation rate differential of each country is obtained in order to test the existence of inflation convergence. We employ the traditional LM and RALS-LM unit root tests that consider the structural breaks. After determining that the residuals of the regressions used in the traditional LM unit root tests do not fit the assumption of normal distribution, so we consider the results of the RALS-LM unit root tests. According to the empirical results, it is found that only India and Turkey are convergent. Therefore, it can be stated that inflation convergence in the Fragile Five countries is weak. The presence of weak inflation convergence in the Fragile Five countries indicates that a common monetary policy cannot be designed for these countries and also a common monetary union cannot be constituted.

Suggested Citation

  • Özlem GöktaÅŸ, 2024. "Inflation Convergence In Fragile Five Countries: Evidence From Rals-Lm Unit Root Tests," Eurasian Eononometrics, Statistics and Emprical Economics Journal, Eurasian Academy Of Sciences, vol. 25(25), pages 1-11, March.
    • Handle: RePEc:eas:econst:v:25:y:2024:i:25:p:1-11
    DOI: 10.17740/eas.stat.2024-V25-01
    as

    Download full text from publisher

    File URL: https://eurasianacademy.org/index.php/econstat/article/view/1494
    Download Restriction: no
    File URL: https://libkey.io/10.17740/eas.stat.2024-V25-01?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eas:econst:v:25:y:2024:i:25:p:1-11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kutluk Kagan Sumer (email available below). General contact details of provider: https://www.eurasianacademy.org/index.php/econstat .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.