Inflation Bias after the Euro: Evidence from the UK and Italy
27 Pages Posted: 14 Oct 2004
Date Written: October 2004
This paper presents an indirect approach to investigate the possible existence of measurement error bias in the Harmonized Index of Consumer Prices for the UK and Italy. Our empirical results show that there is no significant evidence for a bias in the UK, nor for Italy prior to the introduction of the Euro. Since January 2002, however, the inflation rate in Italy has been underestimated by at least 6 percentage points.
Keywords: Inflation, Measurement bias
JEL Classification: C22, C43, D14, E31
Suggested Citation: Suggested Citation