ECB paper looks at euro exchange rate shocks
Exogenous exchange rate shocks having more impact on eurozone inflation, researchers find
A working paper published by the Banque de France analyses how different eurozone countries’ inflation rates are affected by exogenous shocks in the euro’s dollar exchange rate.
In Exchange rate shocks and inflation comovement in the euro area, Danilo Leiva-Leon, Jaime Martínez-Martín and Eva Ortega seek to differentiate between effects that are country-specific, or idiosyncratic, and those which are region-wide, or common. They use what they call “a flexible empirical framework based on
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