Determinants of Inflation in the Euro Area is popular PDF and ePub book, written by Ms.Florence Jaumotte in 2012-01-01, it is a fantastic choice for those who relish reading online the Business & Economics genre. Let's immerse ourselves in this engaging Business & Economics book by exploring the summary and details provided below. Remember, Determinants of Inflation in the Euro Area can be Read Online from any device for your convenience.
Determinants of Inflation in the Euro Area Book PDF Summary
While inflation differentials in a monetary union can be benign, reflecting a catch-up process, or an adjustment mechanism to asymmetric shocks or different business cycles, they may also indicate distortions related to inefficiencies in domestic product and labor markets that amplify or make more persistent the impact of shocks on inflation. The paper examines the determinants of inflation differentials in the euro area, with emphasis on the role of country specific labor and product market institutions. The analysis uses a traditional backward-looking Phillips curve equation and augments it to explore the role of collective bargaining systems, union density, employment protection, and product market regulation. The model is estimated over a panel dataset of 10 euro area countries over the period 1983-2007. Results show that high employment protection, intermediate coordination of collective bargaining, and high union density increase the persistence of inflation. Oil and raw materials price shocks are also more likely to be accommodated by wage increases when the degree of coordination in collective bargaining is intermediate. These results are robust to different estimation methods, model specifications, and outliers. The paper suggests that reforming labor market institutions may improve the functioning of the euro area by reducing the risk of persistent inflation differentials.
Detail Book of Determinants of Inflation in the Euro Area PDF
- Author : Ms.Florence Jaumotte
- Release : 01 January 2012
- Publisher : International Monetary Fund
- ISBN : 9781463933807
- Genre : Business & Economics
- Total Page : 36 pages
- Language : English
- PDF File Size : 9,6 Mb
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