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Corresponding Author:
David Mayes, Department of Accounting and Finance, University of Auckland, New Zealand

Coauthors:
Maritta Paloviita, Bank of Finand, Helsinki
Matti Viren, University of Turku and Bank of Finland, Helsinki, Finland

EMU and the Anchoring of Inflation Expectations

Volume 69 - Issue 4, October 2016
(pp. 341-364)
JEL classification: E31, E61
Keywords: Misery-Index, Inflation, Unemployment, Phillips Curve

Abstract

This paper provides a new way of assessing the credibility of monetary policy by analyzing the dispersion of inflation-unemployment observations over time, which is both simple and free from ambiguities related to the choice of the Phillips curve specification and modelling of inflation expectations. The analysis uses data from eleven EMU countries and nine non-EMU countries for 1984-1998 and 1999-2013. The dispersion measures use alternative weights for inflation and unemployment and also a simple Misery index. We find that dispersion has decreased during the EMU period but this just mirrors experience in the OECD over the same period.


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Institute for International Economics
of the Genoa Chamber of Commerce


Istituto di Economia Internazionale
Camera di Commercio di Genova
Via Garibaldi, 4 (III piano) - 16124 Genova (Italy)
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