Chalstrom, Ann

Lowry, Faculty Advisor, Pam

Digital Commons @ Illinois Wesleyan University

Illinois Wesleyan UniversityDigital Commons @ IWUJohn Wesley Powell Student ResearchConference 1994, 5th Annual JWP ConferenceApr 23rd, 9:00 AM - 4:00 PMInflation in the European Community: A StudyBefore and After German UnificationAnn ChalstromIllinois Wesleyan UniversityPam Lowry, Faculty AdvisorIllinois Wesleyan UniversityFollow this and additional works at: http://digitalcommons.iwu.edu/jwprcThis Event is brought to you for free and open access by The Ames Library, the Andrew W. Mellon Center for Curricular and FacultyDevelopment, the Office of the Provost and the Office of the President. It has been accepted for inclusion in Digital Commons @ IWU bythe faculty at Illinois Wesleyan University. For more information, please contact digitalcommons@iwu.edu.©Copyright is owned by the author of this document.Ann Chalstrom and Pam Lowry, Faculty Advisor, "Inflation in the European Community: A Study Before and AfterGerman Unification" (April 23, 1994). John Wesley Powell Student Research Conference. Paper 4.http://digitalcommons.iwu.edu/jwprc/1994/posters/4INFLATION IN THE EUROPEAN COMMUNITY: A STUDY BEFORE AND AFTER GERMAN UNIFICATION Ann Chalstrom and Pam LoWry* , Department of Economics , IWU This proj ect focuses on the economic interaction among the member nations of the European Community (EC) by studying inflation rates in the EC before and after German unification, which occurred in 1990. The first hypothesis tested in this project states that before 1991, the implementation in the EC of a fixed exchange rate system with a band along with a strong , stable German economy , led to inflation rate convergence by the E C  member nations to German inflation rates . The second hypothesis tested in this study states that German unification, which has had a destabilizing effect on the German domestic economy , resulted in inflation rate divergence from Germany by the EC member nations . The implementation of a fixed exchange rate system is the theory which explains convergence of inflation rates . The results , presented in descriptive graphs , statistical tests , and a regression model , show that inflation rate convergence by the EC members to German inflation rates occurred before German unification , while after unification, EC members ' inflation rates were no longer drawn to Germany ' s  rates of inflation . 

Inflation in the European Community: A Study Before and After German Unification

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Inflation in the European Community: A Study Before and After German Unification

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