INFLATION PERSISTENCE AND UNIT ROOT TESTS IN THE EURO AREA COUNTRIES

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dc.contributor.authorVyrostková, Lenka
dc.contributor.authorMirdala, Rajmund
dc.contributor.otherEkonomická fakultacs
dc.date.accessioned2022-12-12T11:20:19Z
dc.date.available2022-12-12T11:20:19Z
dc.description.abstractPersistence is one of the main characteristics of inflation. One of the definitions of persistent inflation is, that it is the rate at which inflation reaches equilibrium after a certain macroeconomic shock. If the inflation persistence is high, the response to inflation shocks is long-lasting and difficult for the central bank to control. Conversely, if the country’s inflation persistence is low, the central bank can keep the inflation rate in line with the inflation target. The recent economic crisis made central banks adopt several unconventional monetary policy instruments to boost economic recovery and preserve price stability. Many authors note that data on stationary inflation in the euro area countries is a precondition for joining the European Union. As far as the functioning of the European Union is concerned, it is desirable to take the necessary decisions. The primary objective of the paper is to test the inflation rate data in the euro area countries to verify the existence of a unit root considering that central banks design their monetary policy frameworks under the assumption that inflation is a stationary process. The verification of the stationarity of the inflation data is divided into two sections. In the first section, the monthly data panel of the Harmonised Index of Consumer Prices (HICP) for euro-zone countries is used. The second section uses a panel of monthly data the Harmonised Index of Consumer Prices for each category of Classification of Individual Consumption by Purpose for euro area countries. Our results indicate that time series for inflation in 11 of 19 euro area member countries are non-stationary and have a unit root. Considering our results we propose the creation of a two-speed euro area and the adjustment of the monetary policy framework in the euro area countries.en
dc.formattext
dc.identifier.doi10.15240/tul/001/2022-4-001
dc.identifier.eissn2336-5604
dc.identifier.issn1212-3609
dc.identifier.urihttps://dspace.tul.cz/handle/15240/166296
dc.language.isoen
dc.publisherTechnická Univerzita v Libercics
dc.publisherTechnical university of Liberec, Czech Republicen
dc.publisher.abbreviationTUL
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dc.relation.ispartofEkonomie a Managementcs
dc.relation.ispartofEconomics and Managementen
dc.relation.isrefereedtrue
dc.rightsCC BY-NC
dc.subjectinflation persistenceen
dc.subjectunit root testsen
dc.subjecteuro area countriesen
dc.subject.classificationE31
dc.subject.classificationE52
dc.titleINFLATION PERSISTENCE AND UNIT ROOT TESTS IN THE EURO AREA COUNTRIESen
dc.typeArticleen
local.accessopen
local.citation.epage19
local.citation.spage4
local.facultyFaculty of Economics
local.filenameEM_4_2022_1
local.fulltextyes
local.relation.abbreviationE+Mcs
local.relation.abbreviationE&Men
local.relation.issue4
local.relation.volume25
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