The Minimum Inflation Rate for Euroland
By H. Sinn, Michael Reutter. Social Science Research Network, 2000
179 citations recorded by the source corpus.
As a result of the Balassa effect relative prices change rapidly between and within the euro countries. Thus it is impossible to find a common monetary policy that will result in price stability in all countries. Based on empirical estimates of the Balassa model, the paper calculates a minimum aggregate inflation rate which is compatible with the requirement that no country face a deflation. This minimum aggeragate inflation rate is 0.94% in the euro-11 countries and 1.13% in an extended Europe which incorporates the east European countries.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/dd3badeec92d7e2975b8af3309bd87866be0f41a
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In Economics and Econometrics
- Michael Ehrmann
- Ignazio Angeloni
- Marcel Fratzscher
- Frank Smets
- F. Mongelli
- L. Gambacorta
- G. Peersman
- Heikki Lehkonen
Citations in the corpus
- Euro Area Inflation Differentials (2007, background): “Differences in inflation and other cyclical variables are not unusual in large currency areas, as we will show.”
- The Balassa–Samuelson Effect in Central Europe: A Disaggregated Analysis (2004, unknown): “For other countries, the estimated Balassa-Samuelson effect is considerably lower than that found in other studies (eg, estimates for Hungary and Poland in Egert (2002a and 2002b), Halpern and Wyplosz (2001), Rother (2000); Simon and Kovacs (1998); Sinn and Reutter (2001)).”
- Monetary policy implementation and transmission in the European Monetary Union (2001, unknown): “2 For some suggestive calculations of the implications of dierences in labor productivity on ination dierentials as postulated by the Balassa-Samuelson theory see Sinn and Reutter (2001) .”