Inflation and Output Comovement in the Euro Area: Love at Second Sight?
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper discusses comovement between inflation and output in the euro area. The strength of the comovement may not be apparent at first sight, but is clear at business cycle frequencies. Our results suggest that at business cycle frequency, the output and core inflation comovement is high and stable, and that inflation lags the cycle in output with roughly half of its variance. The strong relationship of output and inflation hints at the importance of demand shocks for the euro area business cycle.
Series:
Working Paper No. 2013/192
Subject:
Business cycles Consumer price indexes Economic growth Inflation Inflation targeting Monetary policy Prices
English
Publication Date:
September 11, 2013
ISBN/ISSN:
9781475538939/1018-5941
Stock No:
WPIEA2013192
Pages:
26
Please address any questions about this title to publications@imf.org