This paper explores inflation determinants within the EU and implications for new members'' euro adoption plans. Factor … analysis partitions observed inflation in EU25 countries into common-origin and country-specific (idiosyncratic) components …. Cross-country differences in common-origin inflation within the EU are found to depend on gaps in the initial price level …

adjustment rule, under alternative inflation targets, in terms of output losses in a macroeconomic model, using European Union … credibility, and that a positive inflation target, as opposed to zero inflation, leads to higher and less volatile output. These … countries supports country-specific flexible inflation targeting …

internal demand, and low inflation. Executive Directors agreed that favorable external developments and sound macroeconomic … wage moderation and set in motion domestic inflation pressures. They emphasized the need to tighten monetary and fiscal …

weaker and inflation higher than generally expected. To a large extent, this is the result of a series of unanticipated …