Thursday, January 8, 2015

Eurozone deflation?

Eurozone deflation? This isn't a surprise to anyone who has been following this blog.

Here are some updated graphs for the Eurozone (I think I mess up the Eurozone/EU terminology frequently ... one refers to the currency area, the other a political union). First graph is the model calculation, the second is the smoothed version with predicted values.



Why do we neglect 500 € notes? See here. However it doesn't make a large difference on this time scale. Note that this EU number is a weighted average over the different countries, so e.g. España está sufriendo el desinflamiento (see e.g. here).

1 comment:

  1. I'd like to note I've been predicting near zero inflation for the Eurozone since November 2013 (per the second link in the post above). That is over a year in advance!

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Also, try to avoid the use of dollar signs as they interfere with my setup of mathjax. I left it set up that way because I think this is funny for an economics blog. You can use € or £ instead.