Inflation Differentials of Euro Countries and Their Determinants
Round 1
Reviewer 1 Report
A small number of literature items (23). Especially the latest publications - only one publication from 2021.
Authors should add the most important recent publications on the issues discussed and include them in the literature review.
If the authors find it valuable, the latest research results can also be cited in the "Conclusions and Policy Implications" section. Then the obtained research results could be compared with the conclusions of other authors.
The study period covers the years 1999-2020. There should be greater justification for why such a period was chosen for the study. Especially since after 2021 we are dealing with a large increase in inflation in many countries. Wouldn't it be reasonable to add the most recent years? If not, it should be made more visible why it ended in 2020.
English language correct. Minor editing of English language required.
Generally, the English language is correct. Minor English editing is required.
Author Response
Author’s reply to the comments
Reviewer 1
Comment #1:
“A small number of literature items (23). Especially the latest publications - only one publication from 2021.”…… “Authors should add the most important recent publications on the issues discussed and include them in the literature review”.
Reply
The literature has been enriched with 14 additional relative papers. It is true however that there is not a plethora of recent publications which is also the reason for the writers’ interest in the topic of inflation differentials. The additional publications included are highlighted in the text and are mentioned in the literature review.
Comment #2:
If the authors find it valuable, the latest research results can also be cited in the "Conclusions and Policy Implications" section. Then the obtained research results could be compared with the conclusions of other authors.
Reply
We have added two paragraphs (lines 519-530 on the revised text) to compare the obtained results with the conclusions of other authors. We have highlighted these in the text.
Comment #3
The study period covers the years 1999-2020. There should be greater justification for why such a period was chosen for the study. Especially since after 2021, we are dealing with a large increase in inflation in many countries. Wouldn't it be reasonable to add the most recent years? If not, it should be made more visible why it ended in 2020.
Reply
We justify our data selection in Section “5.Data”. In the first paragraph we added lines 424-428 (highlighted in the revised text) explaining why we did not include more recent data. In essence, the inclusion would be premature because of the insufficient data availability. The conclusions would most likely be rushed and inconclusive when it comes to the effects of the COVID-19 crisis on inflation differentials. Furthermore, our research takes on the role of an update of the research question of previous studies that took place in the early years of the EMU. In our revised text, we incorporate a clearer statement about our choice not to include these two years of data and we also mention it as our proposition for future research in section “7. Conclusions and Policy Implications”, last paragraph, (lines 552-559, revised text).
Comment #4
English language correct. Minor editing of English language required.
Reply
Thank you for this comment. We did additional editing.
Reviewer 2 Report
The authors gathered and shaped the existing material correctly. The authors are familiar with the current state of knowledge. The topic is relevant to the scope of the Economies. The title is appropriate. The abstract and keywords are adequate. The paper is logically and technically correct and well presented and organized. It is recommended for publication after minor revisions.
-My suggestion for authors is to remove “footnote 2” from the paper. (Line 214)
-Authors must remove from the paper “Results obtained using Stata command xtserial.” It does not matter. (In the title of Table 1).
-Jappelli and Pagano (Line 222) and Jager and Hafner (Line 245) are written two times; remove them.
-Figures 3 and 4 are illegible; the authors should consider representing data differently.
-Line 366: After Arellano and Bond put the year.
-Line 382: After Arellano and Bond put the year.
- Table 2: I would put this sentence in Notes: “All variables are expressed as differences from the 12 country average. The descriptive statistics include the No of observations, the mean, the standard deviation, and the maximum and minimum values observed among all the 12 countries through all the years under study.”
-Below Table 4, put Notes and indicate statistical significance.
-In Conclusion, mark future research.
-Now, results are partially compared with the literature. It has to be with more details.
-References have to be enriched with new sources of the literature.
Author Response
Author’s reply to the comments
Reviewer 2
Comment#1
The authors gathered and shaped the existing material correctly. The authors are familiar with the current state of knowledge. The topic is relevant to the scope of the Economies. The title is appropriate. The abstract and keywords are adequate. The paper is logically and technically correct and well presented and organized. It is recommended for publication after minor revisions.
Reply
Thank for the comment.
Comment#2
-My suggestion for authors is to remove “footnote 2” from the paper. (Line 214)
-Authors must remove from the paper “Results obtained using Stata command xtserial.” It does not matter. (In the title of Table 1).
-Jappelli and Pagano (Line 222) and Jager and Hafner (Line 245) are written two times; remove them.
-Figures 3 and 4 are illegible; the authors should consider representing data differently.
-Line 366: After Arellano and Bond put the year.
-Line 382: After Arellano and Bond put the year.
- Table 2: I would put this sentence in Notes: “All variables are expressed as differences from the 12 country average. The descriptive statistics include the No of observations, the mean, the standard deviation, and the maximum and minimum values observed among all the 12 countries through all the years under study.”
-Below Table 4, put Notes and indicate statistical significance.
Reply
We took care of all these points. See highlighted text
Specifically:
- “Footnote 2” is removed (See bottom of page 5 of the revised text).
- “Results obtained using Stata command xtserial.” is removed (See page 10 of the revised text).
-Jappelli and Pagano (Line 225 of the revised text) and Jager and Hafner (Line 247 of the revised text) are written once.
- When it comes to figures 3 and 4, since our goal is for the reader to get the full picture of the pre and post-2008 data, we did not change the figures themselves but we emphasized the point that we would like to get across (see new figures 3 and 4 on page 9 of the revised text).
-We put the year of Arellano and Bond (lines 367 and 373 of the revised text)
- Table 2: We put the sentence “All variables are expressed as differences from the 12 country average. The descriptive statistics include the No of observations, the mean, the standard deviation, and the maximum and minimum values observed among all the 12 countries through all the years under study.” in Notes (see page 12).
-Table 4, we put Notes and indicated statistical significance (page 13 of the revised text).
Comment # 3
-In Conclusion, mark future research.
Reply
We added a paragraph in section “7. Conclusions and Policy Implications”, (lines 552-559, revised text) on future research.
Comment # 4
-Now, results are partially compared with the literature. It has to be with more details.
Reply
The literature has been enriched with 14 additional relative papers. It is true however that there is not a plethora of recent publications which is also the reason for the writers’ interest in the topic of inflation differentials. The additional publications included are highlighted in the text and are mentioned in the literature review. We have added two paragraphs (lines 519-530 in the revised text) to compare the obtained results with the conclusions of other authors. We have highlighted these in the text.
Round 2
Reviewer 1 Report
The article may be published.
Reviewers' comments have been added.
