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Does European Monetary Union make inflation dynamics more uniform?

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  • Stefano Maria Iacus
  • Giuseppe Porro

Abstract

Using a non-parametric method to characterize Markovian operators, we describe the evolution of the short-run inflation processes among the EMU countries between 1996 and 2012. While a progressive clustering pattern can be outlined in the first half of the period -- showing that the monetary union makes price dynamics more homogeneous -- starting from 2004, an increase in price volatility makes the clustering pattern unstable, as the analysis of the changing points of the inflation processes confirms.

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  • Stefano Maria Iacus & Giuseppe Porro, 2014. "Does European Monetary Union make inflation dynamics more uniform?," Applied Economics Letters, Taylor & Francis Journals, vol. 21(6), pages 391-396, April.
    • Handle: RePEc:taf:apeclt:v:21:y:2014:i:6:p:391-396
    DOI: 10.1080/13504851.2013.848018
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    1. Hélène Syed Zwick & S. Ali Shah Syed, 2017. "The polarization impact of the crisis on the Eurozone labour markets: a hierarchical cluster analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 24(7), pages 472-476, April.

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    More about this item

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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