Inflation and Output Comovement in the Euro Area Love at Second Sight?

This paper discusses comovement between inflation and output in the euro area. The strength of the comovement may not be apparent at first sight, but is clear at business cycle frequencies. Our results suggest that at business cycle frequency, the output and core inflation comovement is high and sta...

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Bibliographic Details
Main Author: Andrle, Michal
Other Authors: Bruha, Jan, Solmaz, Serhat
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2013
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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300 |a 26 pages 
651 4 |a United States 
653 |a Business cycles 
653 |a Price indexes 
653 |a Inflation 
653 |a Monetary economics 
653 |a Inflation targeting 
653 |a Deflation 
653 |a Monetary Policy, Central Banking, and the Supply of Money and Credit: General 
653 |a Consumer price indexes 
653 |a Price Level 
653 |a Cycles 
653 |a Economic growth 
653 |a Econometric and Statistical Methods: General 
653 |a Prices 
653 |a Macroeconomics 
653 |a Monetary policy 
653 |a Business Fluctuations 
653 |a Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) 
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700 1 |a Solmaz, Serhat 
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520 |a This paper discusses comovement between inflation and output in the euro area. The strength of the comovement may not be apparent at first sight, but is clear at business cycle frequencies. Our results suggest that at business cycle frequency, the output and core inflation comovement is high and stable, and that inflation lags the cycle in output with roughly half of its variance. The strong relationship of output and inflation hints at the importance of demand shocks for the euro area business cycle