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Inflation Responses to Recent Shocks: Do G7 Countries Behave Differently?


Author Info

  • Lukas Vogel
  • Elena Rusticelli
  • Pete Richardson
  • Stéphanie Guichard
  • Christian Gianella


This paper uses a variety of empirical methods to examine the apparent differences in monetary policy stances as between the United States and other G7 economies, notably those in the euro area, during the period of sharp increases in oil and other commodity prices in the first half of 2008. In particular it asks the question whether observed differences in policy stances could be attributed to differences in economic structures and the vulnerability of different regions to inflationary shocks coming from import prices as opposed to differences in monetary policy objectives. The main conclusion is that although there are a number of differences in the estimated impact and dynamics of commodities, import prices and exchange rates on domestic inflation, which may have contributed to differences in policy stances during the boom in commodity prices, they cannot explain them all. Réponse de l'inflation aux chocs récents : Les pays du G7 diffèrent-ils les uns des autres ? Ce papier utilise plusieurs méthodes empiriques distinctes pour examiner les différences apparentes dans l’orientation des politiques monétaires aux États-Unis et d'autres économies du G7, notamment de la zone euro, pendant la période de fortes hausses des cours du pétrole et des matières premières au premier semestre de 2008. En particulier il pose la question de l’origine des différences observées dans l’orientation des politiques : peuvent-elles être attribuées aux différences de structures économiques et à la vulnérabilité de différentes régions aux chocs inflationnistes venant des prix à l'importation ou aux différences dans les objectifs de politique monétaire. La conclusion principale est que bien qu'il y ait un certain nombre de différences dans l'impact estimé des prix à l'importation des produits de base et des taux de change sur l'inflation domestique et dans leurs dynamiques, lesquels ont pu contribuer aux différences d’orientation des politiques monétaires durant la phase de boom des cours des matières premières, ces différences ne peuvent pas tout expliquer.

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 689.

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Date of creation: 01 Apr 2009
Date of revision:
Handle: RePEc:oec:ecoaaa:689-en

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Keywords: inflation; Phillips curve; DSGE model; import prices; error-correction model; commodity prices; prix des matières premières; coût de transition; courbe de Phillips; modèle DSGE; prix des importations; modèles à correction d’erreurs;

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Cited by:
  1. Wolfgang Pollan, 2013. "Inflation Persistence or the Protracted Effects of Commodity Price Changes?," WIFO Working Papers 451, WIFO.


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