Revisiting inflation in the euro area allowing for long memory

Javier Hualde; Fabrizio Iacone

doi:10.1016/j.econlet.2017.04.025

Revisiting inflation in the euro area allowing for long memory

Javier Hualde, Fabrizio Iacone

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

We analyse inflation and inflation differentials in the euro area allowing for long memory and a new type of limiting theory denoted fixed-bandwidth. Our results differ from the traditional ones based on standard normal asymptotics and the short memory assumption, and we also find that the inflation differentials between “core” and “peripheral” countries are strongly persistent. “Core” economies
appear to have less persistent differentials and may be more integrated, while “peripheral” countries with high inflation may find themselves under competitive pressure for a long time.

Original language	English
Pages (from-to)	145-150
Number of pages	6
Journal	Economics Letters
Volume	156
Early online date	25 Apr 2017
DOIs	https://doi.org/10.1016/j.econlet.2017.04.025 https://doi.org/10.1016/j.econlet.2017.04.025
Publication status	Published - Jul 2017

Bibliographical note

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Revisiting inflation in the euro area allowing for long memory
© 2017 Elsevier B.V. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy.
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Cite this

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AB - We analyse inflation and inflation differentials in the euro area allowing for long memory and a new type of limiting theory denoted fixed-bandwidth. Our results differ from the traditional ones based on standard normal asymptotics and the short memory assumption, and we also find that the inflation differentials between “core” and “peripheral” countries are strongly persistent. “Core” economiesappear to have less persistent differentials and may be more integrated, while “peripheral” countries with high inflation may find themselves under competitive pressure for a long time.

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