01975cas a2200253 a 4500 AALejournalIMF014776 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484300527 1018-5941 BD-DhAAL BD-DhAAL Iossifov, Plamen. Are Non-Euro Area EU Countries Importing Low Inflation from the Euro Area? / Plamen Iossifov, Jiri Podpiera. Washington, D.C. : International Monetary Fund, 2014. 1 online resource (34 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The synchronized disinflation across Europe since end-2011 raises the question of whether non-euro area EU countries are affected by the undershooting of the euro area inflation target. To shed light on this issue, we estimate an open-economy, New Keynsian Phillips curve, in which we control for imported inflation. Regression results suggest that falling food and energy prices have been the main disinflationary driver. But low core inflation in the euro area has also had a clear and significant impact. Countries with more rigid exchange-rate regimes and higher share of foreign value added in domestic demand have been more affected. The scope for monetary response to low inflation in non-euro area EU countries depends on concerns about financial stability and unanchoring of inflationary expectations, as well as on exchange rate regime and capital flows dynamics. Mode of access: Internet Podpiera, Jiri. IMF Working Papers; Working Paper ; No. 2014/191 Full text available on IMF http://elibrary.imf.org/view/journals/001/2014/191/001.2014.issue-191-en.xml IMF e-Library