Regional inflation rate differentials: potential causes, and evidences from the euro area and Hungary

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Zsibók, Zsuzsanna
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Slovak Academy of Sciences
The focus of our research is on the spatial heterogeneities in the observed inflation rates within a currency union. We examine what are the characteristics of the regional monetary heterogeneities across the euro zone countries and across the Hungarian regions. Our study provides a detailed description of the potential factors that cause divergent inflation rates within a currency union. Then, we present the empirical results from the literature concerning the underlying reasons for the observed inflation differentials between the euro zone countries. In Hungary significant regional inflation heterogeneities were reported in empirical works, therefore we try to assess the possible reasons behind these differentials and compare our results to those observed in the euro area. The basis of our analysis is a disaggregated data set which contains store-level price quotes at a monthly frequency. This data set is complemented by other relevant macroeconomic variables measured at the county-level.
infláció , területi egyenlőtlenségek , valutaunió , euroövezeti országok , Magyarország , infláció - Magyarország
Workie, Tiruneh M; Radvansky, M (szerk.) Regional Disparities in Central and Eastern Europe : Theoretical Models and Empirical Analyses Bratislava : Slovak Academy of Sciences, 2010. pp. 241-258.