Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/281719 
Year of Publication: 
2023
Citation: 
[Journal:] Amfiteatru Economic Journal [ISSN:] 2247-9104 [Volume:] 25 [Issue:] 63 [Year:] 2023 [Pages:] 575-592
Publisher: 
The Bucharest University of Economic Studies, Bucharest
Abstract: 
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.
Subjects: 
domestic output gap
global output gap
inflation
the Granger causality test
panel data model.
JEL: 
E31
E32
E58
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.