Inflation Convergence in the European Union: //the effect of monetary regimes, the global financial crisis and the zero lower bound
| Autor: | Mgr. Václav Brož |
|---|---|
| Rok: | 2017 - letní |
| Vedoucí: | prof. Ing. Evžen Kočenda Ph.D., DSc. |
| Konzultant: | |
| Typ práce: | Diplomová Ekonomická teorie |
| Jazyk: | Anglicky |
| Stránky: | 102 |
| Ocenění: | |
| Odkaz: | https://is.cuni.cz/webapps/zzp/detail/177820/ |
| Abstrakt: | Synchronization of inflation cycles is one of the assumptions of the optimum currency area theory and as the vast majority of the countries of the European Union will have adopted the common currency at some point in the future, it is reasonable to analyze their inflation convergence even nowadays. Using the harmonised index of consumer prices measure and employing the highly flexible seemingly unrelated regressions model built on carefully specified Augmented Dickey-Fuller tests, we uncover a widespread, sustained and robust occurrence of inflation convergence in the entire EU between 1999 and 2016. Moreover, this methodology allows us to include several dummy variables indicating specific periods with a potential impact on the process of inflation convergence. In this sense, we show that price stability-oriented monetary regimes (inflation targeting, constraining exchange rate arrangement) seem to have a contributive effect, the periods of the global financial crisis and the zero lower bound generally do not exhibit a distortive one while the impact of implementation of acquis communautaire remains unclear. Our main conclusions imply that inflation synchronization does not seem to pose a challenge for further enlargement of the Eurozone. |
