Regional Inflation Persistence: Evidence from Italy

VAONA A. and ASCARI G. Regional inflation persistence: evidence from Italy, Regional Studies. Regional patterns of inflation persistence have received attention only at the level of European Monetary Union member states. However, economic disparities within European Monetary Union member states are an equally important policy issue. This paper considers a country with a large regional divide - Italy - at a fine level of territorial disaggregation (NUTS-3). It is shown that economically backward regions display greater inflation persistence. Moreover, higher persistence is linked to a lower degree of competitiveness in the retail sector. Finally, the inflation persistence at the national level does not present any geographical aggregation bias, because it equals the mean of inflation persistence of provincial data.