Considerations regarding inflation's evolution in Central and Eastern European countries

Inflation is a macroeconomic phenomenon, intensively experimented by the Central and Eastern European (CEE) countries, new members of the European Union. The analysis was performed on a group of 10 Central and East European countries for the period 1990-2014. The aim of this study is to analyse the inflation phenomenon in this countries in the mentioned period that has been characterized by passing from hyperinflation to deflation. The evolution of inflation rate is extremely important in the present context because of the EU integration and because differences between inflation rates will influence real wages and interest which, in their turn, will affect the capital flows and labour force. The research methodology is new, quitting the classical analyses of ARCH type and instead using the Markov Switching – Auto Regressive (MS-AR) model