Catching-up and Inflation in Europe : Balassa-Samuelson, Engel's Law and Other Culprits

Balázs Égerti iOECD

Organisation for Economic Co-operation and Development

关键词: Bayesian model averaging;    European Union;    Engel’s law;    real convergence;    catching-up;    nonlinearity;    Balassa-Samuelson effect;    inflation;   

DOI  :  https://doi.org/10.1787/5kmblscvdk7d-en

学科分类：社会科学、人文和艺术（综合）

来源: OECD iLibrary

【 摘 要 】

This study analyses the impact of economic catching-up on annual inflation rates in the European Union with a special focus on the new member countries of Central and Eastern Europe. Using an array of estimation methods, we show that the Balassa-Samuelson effect is not an important driver of inflation rates. By contrast, we find that the initial price level and regulated prices strongly affect inflation outcomes in a nonlinear manner and that the extension of Engel’s Law may hold during periods of very fast growth. We interpret these results as a sign that price level convergence comes from goods, market and non-market service prices. Furthermore, we find that the Phillips curve flattens with a decline in the inflation rate, that inflation persistence increases and that commodity prices have a stronger effect on inflation in a higher inflation environment.