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Why Has Inflation in the United States Remained So Low? Reassessing the Importance of Labor Costs and the Price of Imports

Author

Listed:
  • Jorge A Chan-Lau
  • Stephen Tokarick

Abstract

This paper examines some of the factors that have been influential in keeping inflation low in the United States during 1995–98, despite strong growth and high levels of employment. Our results identify three important variables: declines in import prices, a slowdown in the growth of nonwage labor compensation, and a decline in labor costs. We also reassess the role of labor costs and import prices in determining price inflation.

Suggested Citation

  • Jorge A Chan-Lau & Stephen Tokarick, 1999. "Why Has Inflation in the United States Remained So Low? Reassessing the Importance of Labor Costs and the Price of Imports," IMF Working Papers 99/149, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:99/149
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    Citations

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    Cited by:

    1. Attilio Zanetti, 2007. "Do Wages Lead Inflation? Swiss Evidence," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 143(I), pages 67-92, March.
    2. Steven B. Kamin & Mario Marazzi & John W. Schindler, 2004. "Is China "exporting deflation"?," International Finance Discussion Papers 791, Board of Governors of the Federal Reserve System (U.S.).
    3. Martins Bitans & Dace Slakota & Ivars Tillers, 2001. "Price Dynamics in Latvia - Experience and Future Prospects," Working Papers 2001/01, Latvijas Banka.
    4. Martins Bitans, 2002. "Real Exchange Rate in Latvia (1994-2001)," Working Papers 2002/01, Latvijas Banka.

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