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How global is “global inflation”?

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  • Parker, Miles

Abstract

Recent research on high-income economies highlights the role of global factors in explaining the variance of inflation. Data availability has until now limited the analysis beyond this small number of economies. Using a comprehensive new dataset of consumer prices for 223 economies, this paper shows that the observed explanatory power of “global inflation” does not extend to middle and low income economies. Moreover, when inflation is split by sub-component, common factors explain a large share of the variance in energy, and to a lesser extent, food prices but not housing or other prices. How global is “global inflation”? Not very.

Suggested Citation

  • Parker, Miles, 2018. "How global is “global inflation”?," Journal of Macroeconomics, Elsevier, vol. 58(C), pages 174-197.
  • Handle: RePEc:eee:jmacro:v:58:y:2018:i:c:p:174-197
    DOI: 10.1016/j.jmacro.2018.09.003
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    Citations

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    Cited by:

    1. Ha, Jongrim & Kose, Ayhan & Ohnsorge, Franziska, 2019. "Global Inflation Synchronization," CEPR Discussion Papers 13600, C.E.P.R. Discussion Papers.
    2. David Finck & Peter Tillmann, 2019. "The Role of Global and Domestic Shocks for Inflation Dynamics: Evidence from Asia," GRU Working Paper Series GRU_2019_022, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    3. Patrick Blagrave, 2019. "Inflation Co-Movement in Emerging and Developing Asia: The Monsoon Effect," IMF Working Papers 19/147, International Monetary Fund.

    More about this item

    Keywords

    Global inflation; Food prices; Energy prices;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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