The openness-inflation puzzle revisited
Dynamic panel estimates show the negative relation between trade openness and inflation found by Romer (1993) but questioned by Terra (1998) became more robust in the 1990s, both among high income OECD and developing countries. Also during the 1990s, openness was associated with less variable inflation and had a stronger disinflation effect in economies with floating exchange rates.
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- Lane, Philip R., 1997. "Inflation in open economies," Journal of International Economics, Elsevier, vol. 42(3-4), pages 327-347, May.
- M Arellano & O Bover, 1990.
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CEP Discussion Papers
dp0007, Centre for Economic Performance, LSE.
- Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
- Christopher Bowdler, 2004.
"Openness and the output-inflation tradeoff,"
Money Macro and Finance (MMF) Research Group Conference 2003
7, Money Macro and Finance Research Group.
- David Romer, 1991.
"Openness and inflation: theory and evidence,"
Federal Reserve Bank of San Francisco, issue Nov.
- Guender, Alfred V. & McCaw, Sharon, 2000. "The inflationary bias in a model of the open economy: a note," Economics Letters, Elsevier, vol. 68(2), pages 173-178, August.
- Maria Cristina Terra, 1995.
"Openess and inflation: a new assessment,"
Textos para discussão
339, Department of Economics PUC-Rio (Brazil).
- David Romer, 1998. "A New Assessment Of Openness And Inflation: Reply," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 649-652, May.
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