Research

Publications:

“Inflation Targeting and Sovereign Debt Denomination in Developing Countries: The Role of Financial Openness” with Cesar Rodriguez. –-Journal of International Money and Finance, 2019, Elsevier, vol. 97(C), pages 1-18.

“Can Policy Shifts Explain the Forward Discount Puzzle?” with Alex Nikolsko-Rzhevskyy and Michael Jetter -- Empirical Economics, 2019. Springer, vol. 57(6), pages 1891-1909, December.

"Persistence of Prices in the Eurozone Capital Cities: Evidence from the Economist Intelligence Unit City Data"---Economic Modelling, 2019, vol. 76, 330-338. Online Appendix.

"The Role of Inflation Targeting in International Debt Denomination in Developing Countries" with Cesar Rodriguez -- Journal of International Economics 114, 116-129. Online appendix.

"Behavior of Retail Prices in Common Currency Areas: Case of the Eurozone" with Alex Nikolsko-Rzhevskyy. 2018. Economic Modelling, vol. 69(C), 49-57.

"Market Integration and Price Convergence in the European Union" 2015. Journal of International Money and Finance, vol. 56(C), 55-74

Working Papers:

“Price Adjustment during the Great Recession inside and outside the Eurozone” (with Maria Jose Luengo-Prado and Bent Sorensen)

Abstract: We compare the adjustment of relative prices to economic shocks in the Eurozone with adjustments between OECD countries outside the currency area, between U.S. states, and between sub-national regions within some Eurozone countries. Adjustment is quite rapid between OECD countries and U.S. states while prices adjust sluggishly, if at all, between Eurozone countries. The common currency, combined with the structure of European economies, appears to be a much larger impediment to adjustment than the common currency shared between the U.S. states.

“The Impact of Trade on Price Differentials in the European Union”

Abstract: Wide price differences still exist across the members of the European Union. While differentials among the old" EU members have changed little over time, large price differentials between the Central and Eastern EU and the Eurozone have reduced significantly with prices completely converging to the levels of the Southern EU. Using Economist Intelligence Unit city data I test the effect of trade on price differentials. The fixed effects estimate shows strong correlation between price differentials and bilateral trade, a 1% increase in bilateral trade reduces price differences by 9%. This finding is completely driven by the Eastern and Central EU. Since the relationship between the price differentials and trade can go in either direction, an instrument is required to estimate a causal relationship. Instrumental-variables strategy shows that the effect of trade on price differentials for the Eastern and Central EU is even larger, at 13%, while the effect on price differentials of the remaining EU members is insignificant.