Abstract (may include machine translation)
This paper analyzes the common behaviour of inflation and inflation transmission process in the Czech Republic, Slovakia, Hungary and Poland, i.e. in the so called Visegrad group of countries (V4) together with the euro-area inflation for the period 1997-2010. Our investigation of the long- and short-term shocks is based on the Vector Error Correction Model (VECM) estimation, Granger causality tests and vector autoregressive modelling. As the results do not show obvious evidence of one-directional inflation transmission originating from the euro area towards the V4 countries, we calculate variance decomposition which shows towards pre-dominance of price shocks originating from the euro-area towards the smaller of the V4 economies and which unifies the long- and shortterm approach. Major country of this region, Poland, seems to be quite independent from the euro-area price shocks. In the case of Slovakia, running under the ERM II mechanism since November 2005 and member of the euro area since January 2009, relative independence from non-domestic price shocks is presented. The paper was elaborated within the projects VEGA 1/0788/10 and VEGA 1/0973/11.
Original language | English |
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Pages (from-to) | 59-67 |
Number of pages | 9 |
Journal | International Research Journal of Finance and Economics |
Volume | 70 |
State | Published - Jul 2011 |
Keywords
- Inflation
- Inflation Transmission
- The Visegrad Group (V4)