Inflation aversion in the European Union: exploring the myth of a North–South divide | Zendy

David Howarth | Zendy; Charlotte Rommerskirchen | Zendy

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Inflation aversion in the European Union: exploring the myth of a North–South divide

Author(s) -

David Howarth,

Charlotte Rommerskirchen

Publication year - 2016

Publication title -

socio-economic review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 1.737

H-Index - 54

eISSN - 1475-147X

pISSN - 1475-1461

DOI - 10.1093/ser/mww008

Subject(s) - eurobarometer , inflation (cosmology) , european union , mythology , german , political science , economics , stability (learning theory) , output gap , economy , economic history , political economy , sociology , keynesian economics , monetary policy , geography , history , international economics , classics , physics , theoretical physics , archaeology , machine learning , computer science

Our study seeks to prove that German Stability Culture is a myth. The concept is a core legitimizing element of economic policy discourse in Germany and used regularly to juxtapose Germany and northern Europe and the euro area periphery. Using Eurobarometer surveys we construct a measurement for Stability Culture which is based on the priority assigned to the fight against inflation. Our empirical analysis covers the 2002 to 2010 timespan and includes 27 European Union Member States. Our results show that the distinction between northern states with an allegedly strong and southern states with an allegedly weak Stability Culture is a myth. Controlling for actual inflation, we find that the northern Member States with an allegedly high Stability Culture are less concerned with price stability than the rest of the EU.

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