The relationship between inflation and price variability has been of interest to economists for many years. Recently, Ball and Mankiw [1995] have proposed a menu-cost model of price stickiness in which the skewness of relative price infla - tion matters as well as the standard deviation. In this...

This paper studies the applicability of the Marshall-Lerner condition to the “basic” Obstfeld and Rogoff (1995) model. It shows that the Marshall-Lerner condition does apply to this class of models with homothetic preferences when product differentiation across countries is imposed. This...

We develop a generalised impulse response function (GIRF) approach to explore the different impacts of aggregate and sectoral shocks within a VAR-GARCH-M model. Using the outout of our GIRF analysis, we explore the behaviour of three European countries(Gremany, Spain and the UK). We analyse the...

Using Chinese provincial data, we examine the relationship between relative prices and wages, which can be derived on the basis of the Balassa-Samuelson theorem. First, considering cross sectional dependency in our data, we implement recently developed panel unit root tests. We report strong...

This paper uses correlation of business cycles to gauge the degree of economic integration of the Chinese provinces. The more integrated the provincial economies are, the stronger their correlations should be. Only the correlations between some provinces in eastern China are found to be...

Symmetry of shocks across countries is often considered as a necessary condi - tion for a monetary union. We show that the measure of shocks symmetry does not reveal a deep parameter, and depends on economic integration. The more integrated economies are, the more asymmetric are GDPs for a given...

This paper examines synchronization in the euro area and the role of intra-EMU trade from 1981 to 2011, focusing in particular on southern European countries. The results indicate that the intensification of synchronisation that occurred in the nineties across almost all countries could...

This paper examines the long-run and short- run effects of depreciation/ devaluation for major European Union countries (Germany, France, the Unit - ed Kingdom, and Italy) over the 1975-1997 period. The approach is based on cointegration techniques proposed by Johansen [1988] and uses quarterly...

The aim of this paper is to investigate whether price dynamics is homogeneous across the Eurozone countries. Relying on monthly data over the January 1970~July 2011 period, we test for the absolute purchasing power parity (PPP) hypothesis through the implementation of second and third-generation...

Following the 2008 financial crisis, the world’s attention was drawn to the periphery of the European Union, where economic openness and pegs to the Euro combined to destabilize the region. This study measures the output volatility of a set of Central and Eastern European countries from the...