DID THE UNDERLYING BEHAVIOR OF INFLATION CHANGE IN THE 1980S - A STUDY OF 17 COUNTRIES

Did the Underlying Behaviour of Inflation Change in the 1980s? A Study of 17 Countries. - Have the ERM member countries experienced a regime change to a lower degree of persistence for inflation in the 1980s co mpared to the 1970s? Some results give the impression that deflationar y policies associated with ERM membership may have reduced the mean le vel of inflation, but did not reduce the persistence parameter over th e last decade. However, other results show that the persistence parame ter does decline for a majority of ERM members. Surprisingly, the resu lts also show stronger evidence of a fall in inflation persistence for some non-ERM countries who adopted a strong anti-inflationary stance over the same period.