Inflation Bias after the Euro: Evidence from the UK and Italy

Marini, Giancarlo; Piergallini, Alessandro; Scaramozzino, Pasquale

doi:10.2139/ssrn.603301

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Inflation Bias after the Euro: Evidence from the UK and Italy

27 Pages Posted: 14 Oct 2004

See all articles by Giancarlo Marini

Giancarlo Marini

University of Rome Tor Vergata - Faculty of Economics

Pasquale Scaramozzino

University of Rome II - Faculty of Economics; University of London - School of Oriental and African Studies (SOAS); University of London - Centre for Financial and Management Studies (CeFIMS)

Date Written: October 2004

Abstract

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

Marini, Giancarlo and Piergallini, Alessandro and Scaramozzino, Pasquale, Inflation Bias after the Euro: Evidence from the UK and Italy (October 2004). Available at SSRN: https://ssrn.com/abstract=603301 or http://dx.doi.org/10.2139/ssrn.603301