The output inflation trade-off in the EU: Convergence of Divergence

In this thesis the output-inflation trade-off is studied for the Euro-zone countries. The main question is whether the output-inflation tradeoff as remained stable as a consequence of the introduction of the European Central Bank (ECB). I find no definitive statistical evidence which indicates that the trade-off parameters have converged since the introduction of the ECB. However, I argue that this result could very well be misleading and I give possible explanations for the observed differences for the trade-off parameters.