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Inflation persistence under semi-fixed exchange rate regimes: the European evidence 1974-1998

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  • Kool, C.J.M.

    (Macro, International & Labour Economics)

  • Lammertsma, A.

    (Externe publicaties SBE)

Abstract
In this paper, we empirically investigate the link between exchange rate accommodation and inflation persistence in Europe. We introduce the lagged level of the real exchange rate as an appropriate indicator of exchange rate accommodation. We correspondingly estimate a non-linear autoregressive inflation equation for ten European countries (excluding Germany) for the period 1974:1–1998:2. In the estimation procedure we allow for the presence of an unknown number of shifts in the mean of inflation. Overall, our results provide modest support for the existence of the theoretically hypothesized link between exchange rate accommodation and inflation persistence. Copyright Springer Science + Business Media, Inc. 2005
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Kool, C.J.M. & Lammertsma, A., 2002. "Inflation persistence under semi-fixed exchange rate regimes: the European evidence 1974-1998," Research Memorandum 015, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    • Handle: RePEc:unm:umamet:2002015
    DOI: 10.26481/umamet.2002015
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