Inflation Convergence Within the European Union: A Panel Data Analysis

Kocenda, Evzen and Papell, David (1996): Inflation Convergence Within the European Union: A Panel Data Analysis. Published in: International Journal of Finance and Economics , Vol. 2, No. 3 (1997): pp. 189-198.

Abstract

This paper investigates the question of whether there exists evidence in support of inflation convergence within the European Union. The analysis also focuses on whether the Exchange Rate Mechanism (ERM) helped to accelerate inflation convergence in its member countries. The results of this paper are supportive of convergence. The countries which continuously participated in the narrow ERM bands show a dramatically higher convergence rate during the period following establishment of the mechanism.

• Item Type: MPRA Paper
• Language: English
• Keywords: inflation differential, convergence, panel data, stationarity, exchange rates
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C15 - Statistical Simulation Methods: General; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation

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