Inflation is a monetary phenomenon. While this statement is widely accepted in terms of a long-run relationship, the … quantity theory has been made operational also for the short-run dynamics of inflation by so-called Pstar models. An error … inflation. The response of the HICP is strongly positive. Other factors such as raw material prices and unit labor costs also …

empirical part consists of a cointegration analysis with an error correction mechanism from the mid 80s until 2005. We are able …