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Another look at global disinflation

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  • Sekine, Toshitaka

Abstract

This paper highlights relative price adjustments taking place in the global economy as important sources of the lower levels of inflation rates observed in the recent decades. Using a markup model, it shows substantial effects from declines in wage costs and import prices relative to consumer prices. Out of the five percentage point decline in the inflation rates in eight OECD countries from 1970-1989 to 1990-2006, global shocks to two relative prices account for more than 1.5 percentage points, while a monetary policy shock accounts for another one percentage point. J. Japanese Int. Economies 23 (2) (2009) 220-239.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of the Japanese and International Economies.

Volume (Year): 23 (2009)
Issue (Month): 2 (June)
Pages: 220-239

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Handle: RePEc:eee:jjieco:v:23:y:2009:i:2:p:220-239

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Web page: http://www.elsevier.com/locate/inca/622903

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Keywords: Markup model Open-economy New Keynesian Phillips curve Dynamic factor model Global disinflation;

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References

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Citations

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Cited by:
  1. Auer, Raphael & Mehrotra, Aaron, 2014. "Trade linkages and the globalisation of inflation in Asia and the Pacific," Globalization and Monetary Policy Institute Working Paper 172, Federal Reserve Bank of Dallas.
  2. Carsten A Holz & Aaron Mehrotra, 2013. "Wage and price dynamics in a large emerging economy: The case of China," BIS Working Papers 409, Bank for International Settlements.
  3. Robert Anderton & Alessandro Galesi & Marco Lombardi & Filippo di Mauro, . "Key elements of global inflation," Discussion Papers 09/22, University of Nottingham, GEP.
  4. Ida, Daisuke, 2013. "The gain from commitment in a two-country economy with inflation persistence," Japan and the World Economy, Elsevier, vol. 27(C), pages 58-69.

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