摘要：This paper analyses the long-run determinants of inflation differentials in a monetary
union. First, we aim at stablishing some stylized facts relating the regional dispersion
in headline inflation rates in the euro area as well as in the main components of the
consumer price index.We find that a relatively large proportion of it occurs in the
Service category of the EU´s harmonized conumer price index (HICP).We then lay
out a model of a monetary union with fully flexible prices, the long-run properties of
which are analyzed. Our model departs in several respect from the Balassa-
Samuelson hypotheses. Our results are in contrast with the result that movements in
the real exchange rate are mainly driven by regionally asymmetric productivity shocks
in the traded sectors. Our results point instead to relative variations in productivity in
the non-traded sector as the primary cause of price and inflation differentials, with
shocks to productivity in the traded sector being largely absorbed by movements in
the terms of trade in the regional economies.These shocks are also found to largely
drive the variability of real wages at the country level.
