caa a22 4500 467896194 CHVBK 20180406152804.0 cr unu---uuuuu 170328e20060901xx s 000 0 eng 10.1007/s00181-005-0030-9 doi (NATIONALLICENCE)springer-10.1007/s00181-005-0030-9 Inflation adjustment in the open economy: an I(2) analysis of UK prices [Elektronische Daten] [Heino Nielsen, Christopher Bowdler] This paper estimates a cointegrated vector autoregressive (VAR) model for UK data on consumer prices, unit labour costs, import prices and real consumption growth. The estimated VAR indicates that the nominal variables are characterised by I(2) trends, and that a linear combination of these processes cointegrate to I(1). This supports an analysis in which I(1) and I(2) restrictions are imposed. A key finding is that an increase in real import prices reduces productivity adjusted real wages, such that the change in domestic inflation is moderated. This may explain why the depreciation of sterling in 1992 left inflation unchanged. Springer-Verlag, 2006 Cointegration nationallicence I(2) nationallicence Inflation nationallicence Import prices nationallicence Nielsen Heino Economics Department, University of Copenhagen, Studiestræde 6, Copenhagen, K, Denmark aut Bowdler Christopher Nuffield College, University of Oxford, New Road, OX1 1NF, Oxford, UK aut Empirical Economics Physica-Verlag 31/3(2006-09-01), 569-586 0377-7332 31:3<569 2006 31 181 https://doi.org/10.1007/s00181-005-0030-9 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.1007/s00181-005-0030-9 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Nielsen Heino Economics Department, University of Copenhagen, Studiestræde 6, Copenhagen, K, Denmark aut NATIONALLICENCE 700 1- Bowdler Christopher Nuffield College, University of Oxford, New Road, OX1 1NF, Oxford, UK aut NATIONALLICENCE 773 0- Empirical Economics Physica-Verlag 31/3(2006-09-01), 569-586 0377-7332 31:3<569 2006 31 181 Metadata rights reserved Springer special CC-BY-NC licence nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-springer