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Inflation Globalization and the Fall of Country Specific Fluctuations

  • Haroon Mumtaz


    (Bank of England)

  • Paolo Surico

    (Bank of England)

Inflation in the most industrialized economies of the world has an important international common component that accounts for the historical decline in the national rates. Country specific conditions explain the rise in inflation volatility of the late 1970s and early 1980s, and the subsequent fall. During the last decade, the world contribution to the variance of inflation has become increasingly more important than national contributions. Monetary policy was a relevant source of country specific fluctuations. Our conclusions are based on a time-varying dynamic factor model applied to a large panel of inflation indicators.

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Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2006 with number 166.

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Date of creation: 04 Jul 2006
Date of revision:
Handle: RePEc:sce:scecfa:166
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