Price Competitiveness in the European Monetary Union
31 October 2019 3:00 pm CET
Andreas Eder, BOKU Vienna
In cooperation with:
Venue
wiiw, Rahlgasse 3, 1060 Vienna
Description
The presentation is based on a paper co-authored with Wolfgang Koller and Bernhard Mahlberg.
This paper studies the persistent producer price inflation differentials within the European Monetary Union. By applying a decomposition procedure within the input output framework, the drivers of sectoral producer price inflation in a representative sample of member states are re-vealed. We find that in the pre-crisis period (2000-2008) the inflation differentials in manufactur-ing and market services of all countries vis-à-vis Germany were consistently positive resulting in a loss of price competitiveness for all economies. Manufacturing and market service sectors of many countries continued to lose price competitiveness, though to a lesser extent, also during the crisis period (2009-2014). We observe that differences in unit labour cost developments across countries constitute an important driver, especially in the pre-crisis period. Other drivers, such as import costs, intermediate input costs and operating surpluses also contribute, in particular during the crisis period.
Andreas Eder is Assistent Professor at the Institute for Sustainable Economic Development at the University of Natural Resources and Life Sciences and Institute for Industrial Research, Vienna (BOKU).
Paper and presentation, when available, are posted online after the seminar.
Keywords: European Integration, Producer Price Inflation, Real Exchange Rates, Gross Output Price Deflators, National Accounts
JEL classification: D57, E31, F15, O57