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Another look at global disinflation

In: Financial Globalization, 20th Anniversary Conference, NBER-TCER-CEPR

  • Toshitaka Sekine

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 5 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 1 percentage point.

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This chapter was published in:
  • Takeo Hoshi & Takatoshi Ito, 2009. "Financial Globalization, 20th Anniversary Conference, NBER-TCER-CEPR," NBER Books, National Bureau of Economic Research, Inc, number hosh07-1, December.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 12021.
    Handle: RePEc:nbr:nberch:12021
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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