Convergence, inequality and inflation synchronization: evidence from the Eurozone

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F25%3A43926737" target="_blank" >RIV/62156489:43110/25:43926737 - isvavai.cz</a>

Result on the web

<a href="https://doi.org/10.1007/s10663-025-09646-2" target="_blank" >https://doi.org/10.1007/s10663-025-09646-2</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1007/s10663-025-09646-2" target="_blank" >10.1007/s10663-025-09646-2</a>

Result language

angličtina

Original language name

Convergence, inequality and inflation synchronization: evidence from the Eurozone

Original language description

This paper studies the impact of real convergence in the EU countries on inflation synchronization between these countries and the Eurozone. Inflation co-movement between the Eurozone and the EU countries serves as an important measure of the adequacy of the single monetary policy for both current and future members of the common currency area. We report three major results. First, countries with higher relative GDP per capita in the EU countries report stronger inflation co-movement. Second, the relationship between real convergence and the inflation synchronization is non-linear. Third, lower income inequality is associated with greater inflation co-movement. Our findings suggest that real convergence in the EU is associated with stronger inflation synchronization between the EU countries and Eurozone and more effective common monetary policy in the long run. These results provide support for the &quot;coronation theory&quot; which underscores that monetary integration should follow, rather than precede, the process of real convergence. We show that for the catching-up countries with relatively high GDP per capita the value of waiting for the income gap to narrow is limited as additional convergence implies only moderate increase in inflation co-movement.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50206 - Finance

Project

—

Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2025

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Empirica

ISSN

0340-8744

e-ISSN

1573-6911

Volume of the periodical

52

Issue of the periodical within the volume

3

Country of publishing house

NL - THE KINGDOM OF THE NETHERLANDS

Number of pages

21

Pages from-to

413-433

UT code for WoS article

001435560700001

EID of the result in the Scopus database

2-s2.0-86000300288