Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73610
Authors: 
Mihailov, Alexander
Rumler, Fabio
Scharler, Johann
Year of Publication: 
2009
Series/Report no.: 
Working Paper, Department of Economics, Johannes Kepler University of Linz 0913
Abstract: 
In this paper we evaluate the relative influence of external versus domestic inflation drivers in the 12 new European Union (EU) member countries. Our empirical analysis is based on the New Keynesian Phillips Curve (NKPC) derived in Galí and Monacelli (2005) for small open economies (SOE). Employing the Generalized Method of Moments (GMM), we find that the SOE NKPC is well supported in the new EU member states. We also find that the inflation process is dominated by domestic variables in the larger countries of our sample, whereas external variables are mostly relevant in the smaller countries.
Subjects: 
New Keynesian Phillips Curve
small open economies
inflation dynamics
new EU member countries
GMM estimation
JEL: 
C32
C52
E31
F41
P22
Document Type: 
Working Paper

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