Forces Driving Inflation in the New EU10 Members
IMF Working Papers, March 1, 2009
Source details
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- Forces Driving Inflation in the New EU10 Members
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Bibliographic details
- Authors: Emil Stavrev
- Published: March 1, 2009
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451871999.001
Executive 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.
- Idiosyncratic factors have also played a role in the inflation process; these are related to country-specific financial conditions, pass-through from foreign prices, and the demand-supply situation in each country.
- Administered price adjustments and increases of indirect taxes associated with EU accession are also likely to have played a role.
Key findings
- Common factors contributing to headline inflation:
- Price level convergence.
- EU integration.
- Idiosyncratic (country-specific) contributors:
- Country-specific financial conditions.
- Pass-through from foreign prices.
- Demand-supply conditions in each country.
- Administered price adjustments.
- Increases of indirect taxes associated with EU accession.
Methodology and scope (as stated)
- The study focuses on the new EU10 member countries.
- It is presented as an IMF Working Paper summarizing research in progress.
Subjects and keywords (as listed)
- Subjects: Energy prices, Exchange rate arrangements, Financial services, Foreign exchange, Inflation, Nominal effective exchange rate, Prices, Real interest rates.
- Keywords: Energy prices, Exchange rate arrangements, food inflation, generalized dynamic factor model, Global, inflation, inflation dynamics, inflation expectation, inflation in the NMS, Maastricht inflation criterion, NMS country, NMS policy, NMS relative, Nominal effective exchange rate, price convergence, price level, Real interest rates, WP.