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Inflation at risk from Covid-19

Author

Listed:
  • Ryan Niladri Banerjee
  • Aaron Mehrotra
  • Fabrizio Zampolli

Abstract

The pandemic has increased downside tail risks in advanced economies (AEs), while it has increased both downside and upside tail risks in emerging market economies (EMEs). The collapse in output and oil prices, on balance, increases downside inflation risks. Recent exchange rate depreciations increase upside risks to inflation in EMEs. Tighter financial conditions raise both downside and upside risks. In AEs, the increase in downside risks is more prominent.

Suggested Citation

  • Ryan Niladri Banerjee & Aaron Mehrotra & Fabrizio Zampolli, 2020. "Inflation at risk from Covid-19," BIS Bulletins 28, Bank for International Settlements.
    • Handle: RePEc:bis:bisblt:28
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    References listed on IDEAS

    as
    1. Simon Gilchrist & Raphael Schoenle & Jae Sim & Egon Zakrajšek, 2017. "Inflation Dynamics during the Financial Crisis," American Economic Review, American Economic Association, vol. 107(3), pages 785-823, March.
    2. Fabian Eser & Peter Karadi & Philip R. Lane & Laura Moretti & Chiara Osbat, 2020. "The Phillips Curve at the ECB," Manchester School, University of Manchester, vol. 88(S1), pages 50-85, September.
    3. Nicholas Bloom, 2009. "The Impact of Uncertainty Shocks," Econometrica, Econometric Society, vol. 77(3), pages 623-685, May.
    4. Fernando Alvarez & Martin Beraja & Martín Gonzalez-Rozada & Pablo Andrés Neumeyer, 2019. "From Hyperinflation to Stable Prices: Argentina’s Evidence on Menu Cost Models," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(1), pages 451-505.
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    Cited by:

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    2. Xu, Yingying & Lien, Donald, 2022. "Assessing the impact of COVID-19 on price Co-movements in China," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 79(C).

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