Globalisation effect on inflation in the great moderation era: New evidence from G10 countries
Dynamic econometric models are carefully built to analyse counterfactually the globalisation effect on inflation for ten countries from G10 during the Great Moderation period. The main findings are (i) the effect is highly heterogeneous from country to country; (ii) increases in trade openness could be either inflationary or deflationary whereas increased imports from low-cost emerging-market economies are mostly deflationary; and (iii) there is almost no direct globalisation impact as far as inflation persistence is concerned while the impact on inflation variability can be positive as well as negative. Overall, globalisation is found to have contributed positively to lowering rather than stabilising inflation during the Great Moderation era.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: Kiellinie 66, D-24105 Kiel|
Phone: +49 431 8814-1
Fax: +49 431 8814528
Web page: http://www.economics-ejournal.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alexander Mihailov & Fabio Rumler & Johann Scharler, 2011.
"The Small Open-Economy New Keynesian Phillips Curve: Empirical Evidence and Implied Inflation Dynamics,"
Open Economies Review,
Springer, vol. 22(2), pages 317-337, April.
- Alexander Mihailov & Fabio Rumler & Johann Scharler, 2008. "The Small Open-Economy New Keynesian Phillips Curve: Empirical Evidence and Implied Inflation Dynamics," Economics working papers 2008-17, Department of Economics, Johannes Kepler University Linz, Austria.
- Alexander Mihailov & Fabio Rumler & Johann Scharler, 2008. "The Small Open-Economy New Keynesian Phillips Curve: Empirical Evidence and Implied Inflation Dynamics," Economics & Management Discussion Papers em-dp2008-63, Henley Business School, Reading University.
- Charles Bean, 2010. "Joseph Schumpeter Lecture The Great Moderation, The Great Panic, and The Great Contraction," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 289-325, 04-05.
- Hendry, David F. & Pagan, Adrian R. & Sargan, J.Denis, 1984. "Dynamic specification," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 18, pages 1023-1100 Elsevier.
- Wang, Pengfei & Wen, Yi, 2007.
"Inflation dynamics: A cross-country investigation,"
Journal of Monetary Economics,
Elsevier, vol. 54(7), pages 2004-2031, October.
- Jane Ihrig & Steven B. Kamin & Deborah Lindner & Jaime Marquez, 2010. "Some Simple Tests of the Globalization and Inflation Hypothesis," International Finance, Wiley Blackwell, vol. 13(3), pages 343-375, Winter.
- Carlos Robalo Marques, 2005.
"Inflation persistence: facts or artefacts?,"
Economic Bulletin and Financial Stability Report Articles,
Banco de Portugal, Economics and Research Department.
- Fabio Milani, 2009.
"Global Slack and Domestic Inflation Rates: A Structural Investigation for G-7 Countries,"
080919, University of California-Irvine, Department of Economics.
- Milani, Fabio, 2010. "Global slack and domestic inflation rates: A structural investigation for G-7 countries," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 968-981, December.
- Fabio Milani, 2009. "Global slack and domestic inflation rates: a structural investigation for G-7 countries," Globalization and Monetary Policy Institute Working Paper 33, Federal Reserve Bank of Dallas.
- Gabriele Galati & William R. Melick, 2006. "The evolving inflation process: an overview," BIS Working Papers 196, Bank for International Settlements.
- J. McCarthy, 1999.
"Pass-through of exchange rates and import prices to domestic inflation in some industrialised economies,"
BIS Working Papers
79, Bank for International Settlements.
- Jonathan McCarthy, 2007. "Pass-Through of Exchange Rates and Import Prices to Domestic Inflation in Some Industrialized Economies," Eastern Economic Journal, Eastern Economic Association, vol. 33(4), pages 511-537, Fall.
- Jonathan McCarthy, 2000. "Pass-through of exchange rates and import prices to domestic inflation in some industrialized economies," Staff Reports 111, Federal Reserve Bank of New York.
- Ciccarelli, Matteo & Mojon, Benoît, 2006.
Kiel Working Papers
1337, Kiel Institute for the World Economy (IfW).
- Matteo Ciccarelli & Benoît Mojon, 2008. "Global inflation," Working Paper Series WP-08-05, Federal Reserve Bank of Chicago.
- Ciccarelli, Matteo & Mojon, Benoît, 2006. "Global Inflation," Kiel Working Papers 1337, Kiel Institute for the World Economy (IfW).
- Ciccarelli, Matteo & Mojon, Benoît, 2005. "Global inflation," Working Paper Series 0537, European Central Bank.
- Matteo Ciccarelli & Benoît Mojon, 2005. "Global Inflation," Working Papers Central Bank of Chile 357, Central Bank of Chile.
- Ronald McKinnon & Kenichi Ohno, 2001.
"The Foreign Exchange Origins of Japan's Economic Slump and Low Interest Liquidity Trap,"
The World Economy,
Wiley Blackwell, vol. 24(3), pages 279-315, 03.
- Ronald McKinnon & Kenichi Ohno, 2000. "The Foreign Exchange Origins of Japan's Economic Slump and Low Interest Liquidity Trap," Working Papers 052000, Hong Kong Institute for Monetary Research.
- Ronald McKinnon & Kenichi Ohno, 2000. "The Foreign Exchange Orgins of Japan's Economic Slump and Low Interest Liquidity Trap," Working Papers 00010, Stanford University, Department of Economics.
- Luca Guerrieri & Christopher J. Gust & David López-Salido, 2008.
"International competition and inflation: a New Keynesian perspective,"
International Finance Discussion Papers
918, Board of Governors of the Federal Reserve System (U.S.).
- Luca Guerrieri & Christopher Gust & J. David López-Salido, 2010. "International Competition and Inflation: A New Keynesian Perspective," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 247-80, October.
- Guerrieri, Luca & Gust, Christopher & López-Salido, J David, 2009. "International Competition and Inflation: A New Keynesian Perspective," CEPR Discussion Papers 7561, C.E.P.R. Discussion Papers.
- Mumtaz, Haroon & Surico, Paolo, 2008.
"Evolving International Inflation Dynamics: Evidence from a Time-varying Dynamic Factor Model,"
CEPR Discussion Papers
6767, C.E.P.R. Discussion Papers.
- Haroon Mumtaz & Paolo Surico, 2008. "Evolving international inflation dynamics: evidence from a time-varying dynamic factor model," Bank of England working papers 341, Bank of England.
- Hendry, David F. & Richard, Jean-Francois, 1982.
"On the formulation of empirical models in dynamic econometrics,"
Journal of Econometrics,
Elsevier, vol. 20(1), pages 3-33, October.
- HENRY, David F. & RICHARD, Jean-François, . "On the formulation of empirical models in dynamic econometrics," CORE Discussion Papers RP 502, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Nigel Pain & Isabell Koske & Marte Sollie, 2006. "Globalisation and Inflation in the OECD Economies," OECD Economics Department Working Papers 524, OECD Publishing.
- Laurence M. Ball, 2006. "Has Globalization Changed Inflation?," NBER Working Papers 12687, National Bureau of Economic Research, Inc.
- Nigel Pain & Isabell Koske & Marte Sollie, 2008. "Globalisation and OECD consumer price inflation," OECD Journal: Economic Studies, OECD Publishing, vol. 2008(1), pages 1-32.
- Alessandro Calza, 2009. "Globalization, Domestic Inflation and Global Output Gaps: Evidence from the Euro Area," International Finance, Wiley Blackwell, vol. 12(3), pages 301-320, December.
- Claudio E. V. Borio & Andrew Filardo, 2007. "Globalisation and inflation: New cross-country evidence on the global determinants of domestic inflation," BIS Working Papers 227, Bank for International Settlements.
- Hendry, David F., 1995. "Dynamic Econometrics," OUP Catalogue, Oxford University Press, number 9780198283164, May.
When requesting a correction, please mention this item's handle: RePEc:zbw:ifwedp:201256. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.