Mind the Gap: City-Level Inflation Synchronization

Mind the Gap: City-Level Inflation Synchronization
READ MORE...
Volume/Issue: Volume 2022 Issue 166
Publication date: September 2022
ISBN: 9798400218613
$20.00
Add to Cart by clicking price of the language and format you'd like to purchase
Available Languages and Formats
paperback else
pdf else
epub else
English
Prices in red indicate formats that are not yet available but are forthcoming.
Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Inflation , Economics- Macroeconomics , Economics / General , Inflation synchronization , subnational , transition economies , Lithuania , inflation subcomponent , inflation synchronicity , headline inflation inflation rate , correlation analysis , inflation dynamics , Inflation , Consumer price indexes , Consumer prices , Global financial crisis of 2008-2009 , Housing , Global

Summary

The post-pandemic rise in consumer prices across the world has renewed interest in inflation dynamics after decades of global disinflation. This paper provides a spatial investigation of inflation synchronicity at the city level in Lithuania using disaggregated monthly data during the period 2000–2021. The empirical analysis provides strong evidence that (i) the co-movement of city-level inflation rates—estimated using the instantaneous quasi-correlation approach—is significantly weaker than the extent of synchronization suggested by the simple correlation analysis; (ii) there is substantial heterogeneity in the instantaneous quasi-correlation of inflation subcomponents between city pairs; and (iii) there are significant changes in the degree of city-level synchronization over time, reflecting important economic developments in history such as the global financial crisis, the adoption of euro, and the COVID-19 pandemic.