| Abstract: |
This paper studies the factors that influence inflation in the euro area countries and in the candidate countries. It summarizes the purpose and the impacts of the Maastricht convergence criteria first, then it identifies main sources of inflation in the EMU countries. Similarly to some older papers it reveals an important relationship between inflation and relative price level as well as between inflation and phase of the business cycle. It confirms that the proces of nominal convergence is statistically significant in explaining inflation of the countries concerned. These results are discussed in the context of the candidate countries and their future accession to the auro area, whereas special attention is paid to the case of the Czech republic. |
