Artículo
Is 2% the optimal inflation rate for the Euro Area?
Autor/es | Caraballo, M. Ángeles
Efthimiadis,Tilemahos |
Departamento | Universidad de Sevilla. Departamento de Economía e Historia Económica |
Fecha de publicación | 2012 |
Fecha de depósito | 2018-04-05 |
Publicado en |
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Resumen | According to the relevant literatu
re, monetary policy implications
concerning the optimal inflation rate can be derived by examining the relationship
between inflation and the Relative Price Variability (RPV). This ... According to the relevant literatu re, monetary policy implications concerning the optimal inflation rate can be derived by examining the relationship between inflation and the Relative Price Variability (RPV). This paper studies this issue for selected Euro Area (EA) countries, using monthly data for the Harmonized Index of Consumer Prices. In particular, semi-parametric estimations are employed so as to find the accurate form of the inflation-RPV relationship. The results indicate that this relationship exhibits a U-shape functional profile. Furthermore, the optimal inflation rates for the EA, France, Germany and Spain are also calculated. For all countries and the EA, we find that although the European Central Bank ’ s “ below but close to 2 % ” inflation target is optimal for the EA average, it is not the optimum inflation rate for the individual counties. |
Agencias financiadoras | Junta de Andalucía |
Identificador del proyecto | SEJ-4546 |
Cita | Caraballo, M.Á. y Efthimiadis, i. (2012). Is 2% the optimal inflation rate for the Euro Area?. International Economics and Economic Policy, 9 (3-4), 235-243. |
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