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What Starts Inflation: Evidence from the OECD Countries

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Author Info
Boschen, John F
Weise, Charles L

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Abstract

We use a pooled cross-country time series framework to study the factors associated with the start of 73 inflation episodes in OECD countries since 1960. We find that policy-makers' pursuit of high real growth targets and national elections were important factors in initiating inflation episodes. U.S. inflation turns out to be a triggering event for simultaneous outbreaks of inflation across countries. Several other explanations for inflation starts, including increases in the natural rate of unemployment, oil price shocks, changes in the political orientation of governments, and government debt policy, are not supported by the data.

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Publisher Info
Article provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.

Volume (Year): 35 (2003)
Issue (Month): 3 (June)
Pages: 323-49
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Handle: RePEc:mcb:jmoncb:v:35:y:2003:i:3:p:323-49

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879

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  1. Ilker Domac & Eray M. Yucel, 2003. "What Triggers Inflation in Emerging Market Economies?," Working Papers 0307, Research and Monetary Policy Department, Central Bank of the Republic of Turkey. [Downloadable!]
    Other versions:
  2. James R. Lothian & Cornelia H. McCarthy, 2003. "The Behavior of Money and Other Economic Variables: Two Natural Experiments," International Finance 0311011, EconWPA. [Downloadable!]
  3. Jean-Francois Segalotto & Martin Sommer & Marco Arnone & Bernard Laurens, 2007. "Central Bank Autonomy: Lessons from Global Trends," IMF Working Papers 07/88, International Monetary Fund. [Downloadable!]
  4. Charles Weise, 2004. "Alternative explanations for US inflation performance, 1961-2000," Money Macro and Finance (MMF) Research Group Conference 2003 111, Money Macro and Finance Research Group. [Downloadable!]
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This page was last updated on 2009-11-12.


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