When Inflation Again Matters: Do Domestic and Global Output Gaps Determine Inflation in the EU?
In this paper, we examine whether domestic or global output gap affects inflation in three panels: the European Union, the peripheral countries of the European Union, and the Eurozone. We have also analysed the impact of these variables on inflation in individual countries of the European Union....
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| Format: | Article |
| Language: | English |
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Editura ASE
2023-05-01
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| Series: | Amfiteatru Economic |
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| Online Access: | https://www.amfiteatrueconomic.ro/temp/Article_3213.pdf |
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| author | Jana Budová Veronika Šuliková Marianna Siničáková |
| author_facet | Jana Budová Veronika Šuliková Marianna Siničáková |
| author_sort | Jana Budová |
| collection | DOAJ |
| description | In this paper, we examine whether domestic or global output gap affects inflation in three
panels: the European Union, the peripheral countries of the European Union, and the
Eurozone. We have also analysed the impact of these variables on inflation in individual
countries of the European Union. To find the determinants of inflation, we employ the
Granger causality test and panel regression. The first examined period is from 1Q 1997 to
3Q 2020. The period between 1999 and 2020 is divided into two shorter periods – the
precrisis (1999 – 2008) and postcrisis (2009-2020) period. The results of the study show that
after the crisis the global output gap predicts the evolution of inflation in the Eurozone panel.
On the other hand, the domestic output gap predicts inflation in the European Union. In the
precrisis period, the determinant of inflation is the domestic output gap, specifically in the
Eurozone panel. In the European Union panel and its peripheral economies, the global output
gap determines inflation. In Italy, Lithuania, Estonia, Finland, Latvia, and the Netherlands,
the domestic output gap determines inflation. The global output gap determines inflation in
the Netherlands, Slovenia, Estonia, and Latvia. We demonstrated that there are two ways
dependency among the variables |
| format | Article |
| id | doaj-art-3a6efa67bbf141d5a4cafee18570c730 |
| institution | OA Journals |
| issn | 1582-9146 2247-9104 |
| language | English |
| publishDate | 2023-05-01 |
| publisher | Editura ASE |
| record_format | Article |
| series | Amfiteatru Economic |
| spelling | doaj-art-3a6efa67bbf141d5a4cafee18570c7302025-08-20T02:08:00ZengEditura ASEAmfiteatru Economic1582-91462247-91042023-05-01256357559210.24818/EA/2023/63/575 When Inflation Again Matters: Do Domestic and Global Output Gaps Determine Inflation in the EU?Jana Budová0https://orcid.org/0000-0003-2983-7333Veronika Šuliková 1https://orcid.org/0000-0001-6286-841X Marianna Siničáková2https://orcid.org/0000-0001-7551-4231Technical University of Košice, Košice, SlovakiaTechnical University of Košice, Košice, SlovakiaTechnical University of Košice, Košice, SlovakiaIn this paper, we examine whether domestic or global output gap affects inflation in three panels: the European Union, the peripheral countries of the European Union, and the Eurozone. We have also analysed the impact of these variables on inflation in individual countries of the European Union. To find the determinants of inflation, we employ the Granger causality test and panel regression. The first examined period is from 1Q 1997 to 3Q 2020. The period between 1999 and 2020 is divided into two shorter periods – the precrisis (1999 – 2008) and postcrisis (2009-2020) period. The results of the study show that after the crisis the global output gap predicts the evolution of inflation in the Eurozone panel. On the other hand, the domestic output gap predicts inflation in the European Union. In the precrisis period, the determinant of inflation is the domestic output gap, specifically in the Eurozone panel. In the European Union panel and its peripheral economies, the global output gap determines inflation. In Italy, Lithuania, Estonia, Finland, Latvia, and the Netherlands, the domestic output gap determines inflation. The global output gap determines inflation in the Netherlands, Slovenia, Estonia, and Latvia. We demonstrated that there are two ways dependency among the variableshttps://www.amfiteatrueconomic.ro/temp/Article_3213.pdfdomestic output gapglobal output gapinflationthe granger causality testpanel data model. |
| spellingShingle | Jana Budová Veronika Šuliková Marianna Siničáková When Inflation Again Matters: Do Domestic and Global Output Gaps Determine Inflation in the EU? Amfiteatru Economic domestic output gap global output gap inflation the granger causality test panel data model. |
| title | When Inflation Again Matters: Do Domestic and Global Output Gaps Determine Inflation in the EU? |
| title_full | When Inflation Again Matters: Do Domestic and Global Output Gaps Determine Inflation in the EU? |
| title_fullStr | When Inflation Again Matters: Do Domestic and Global Output Gaps Determine Inflation in the EU? |
| title_full_unstemmed | When Inflation Again Matters: Do Domestic and Global Output Gaps Determine Inflation in the EU? |
| title_short | When Inflation Again Matters: Do Domestic and Global Output Gaps Determine Inflation in the EU? |
| title_sort | when inflation again matters do domestic and global output gaps determine inflation in the eu |
| topic | domestic output gap global output gap inflation the granger causality test panel data model. |
| url | https://www.amfiteatrueconomic.ro/temp/Article_3213.pdf |
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