Politická ekonomie 2017, 65(1):62-81 | DOI: 10.18267/j.polek.1127

Dynamika inflácie v krajinách monetárnej únie: jej vplyv na spoločnú hospodársku politiku

Patrik Kupkovič
Patrik Kupkovič (patrik.kupkovic@nbs.sk), Národná banka Slovenska; Ekonomická univerzita v Bratislave, Fakulta hospodárskej informatiky, Katedra operačného výskumu a ekonometrie

Inflation Dynamics in Countries of the Monetary Union: What is its Impact on the Common Economic Policy?

This paper studies the impact of inflation dynamics on a common economic policy in the monetary union using a small New Keynesian model of the monetary union. We are considering two open economy versions of the Phillips curve: a typical New Keynesian Phillips curve with only forward looking dynamics and a hybrid New Keynesian Phillips curve with forward and backward looking dynamics. The main findings are as follows: (i) the backward looking dynamics (persistence) of inflation in the Phillips curve is an important determinant of the common economic policy in the monetary union; (ii) in the case of asymmetric dynamics of inflation in the monetary union countries, the country with more persistent inflation dynamics has a significant impact on the common economic policy.

Keywords: typical New Keynessian Phillips curve, hybrid New Keynesian Phillips curve, economic policy, Monetary union
JEL classification: E52, E61, E62, E63, F41

Published: February 1, 2017  Show citation

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Kupkovič, P. (2017). Inflation Dynamics in Countries of the Monetary Union: What is its Impact on the Common Economic Policy? Politická ekonomie, 65(1), 62-81. doi: 10.18267/j.polek.1127
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