Economics, Econometrics and Finance
8 years ago

Inflation linked to regional disparities, challenging euro area price stabilization.

The Journal of Economic Asymmetries
The Relation between Inflation and Regional Unemployment and Sectoral Income Growth Dispersion: Evidence from EU-Countries
David G. Mayes, Matti Virén

Paper Summary

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The study looked at data from 15 EU countries to understand how inflation is related to regional unemployment and income growth. The researchers found that inflation is not just linked to the overall unemployment rate, but also to how different regions and sectors are doing economically. This means that inflation is more affected by areas that are close to their maximum capacity. The findings suggest that how prices are controlled in the euro area may need to be reevaluated.