This paper aims to investigate whether the effect of inflation expectations, exchange rate, money supply, industrial production and import prices on inflation depends on business cycle. For this purpose, a two states Markov Switching Auto Regression model with time varying transition...

The pre-crisis monetary policy consensus has been challenged on a number of fronts. Even the nominal target, around which the modern consensus developed, has been called into question, with a vigorous recent debate ensuing about nominal income targeting as an alternative. This paper contributes...

Using a New-Keynesian framework, we investigate how far the inflationary processes in member states of EMU cause regional price levels to converge. We fail to produce hard evidence of the present existence of such an adjustment mechanism, notwithstanding that inflation in some countries tends to...

This paper theoretically examines a way out of the euro crisis based on a model of inflation acceleration and differentials. The conclusion is that, unless more advantaged states (e.g., Germany) systematically transfer a necessary amount of money to less advantaged states (e.g., Greece) in every...

This paper has two main objectives. The first objective is to propose a new indicator of core inflation, which is obtained by idiosyncratic dynamics and cleaning month on month relative price fluctuations from overall price changes. We use a factor model with the subcomponents of CPI inflation...

This paper employs the recently developed structural stability tests with unknown break point and two median unbiased estimation methods to model China inflation persistence over the most recent quarter of a century. Our empirical results suggest that the persistence of both consumer price...

Central banks’ international reserves have increased significantly in the recent past. While this accumulation has been widely perceived as precautionary savings to prevent financial crises, rising reserves might also endanger monetary and financial stability. This paper sheds new light on the...

En este documento se estima un modelo econométrico que descompone la seriede inflación trimestral anualizada entre un componente transitorio y otropermanente, este último inducido probablemente por las variaciones en la metadel Banco Central. Se concluye que la persistencia inflacionaria se...

The differing dynamics of the inflations of the services and goods sectors has been of major concern in Turkey. The persistence of the services sector inflation during disinflation periods hampered the efforts of the Central Bank of Turkey of hitting inflation targets in a country with...

We examine the effect of inflation variability and economic growth using annual historical data on both developing and developed countries. The data cover 182 developing countries and 31 developed countries for the period 1961-2009. Proxying inflation variability by the five-year coefficient of...