Forces Driving Inflation in the New EU10 Members

Author/Editor:

Emil Stavrev

Publication Date:

March 1, 2009

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The paper analyzes the forces driving inflation in the new EU10 member countries. A significant part of headline inflation in these countries is due to common factors, such as price level convergence and EU integration. However, idiosyncratic factors have also played a role in the inflation process. These factors are related to the country-specific financial conditions, pass-through from foreign prices, and demand-supply situation in each country, although administered price adjustments and increases of indirect taxes associated with EU accession are also likely to have played a role.

Series:

Working Paper No. 2009/051

Subject:

Energy prices Exchange rate arrangements Financial services Foreign exchange Inflation Nominal effective exchange rate Prices Real interest rates

English

Publication Date:

March 1, 2009

ISBN/ISSN:

9781451871999/1018-5941

Stock No:

WPIEA2009051

Pages:

18

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