Rather, their magnitude is similar to those differentials seen in the United States among the 14 US Metropolitan Statistical Areas, namely 3.2 percentage points, with an average standard deviation of about 0.9. It should be emphasised that in a monetary union inflation differentials across regions or countries are the natural way of adjusting relative prices in the face of asymmetric demand or supply developments.
I would like to make 4 remarks in this respect. BIS Review 46/2005  1  First, changes in relative prices within the single currency area have been larger and more frequent than anticipated. The idea that the euro area is an area where the single currency prevents adjustment of relative prices is clearly refuted.