Location of Repository

Key elements of global inflation

By Robert Anderton, Alessandro Galesi, Marco Lombardi and Filippo di Mauro

Abstract

Against the background of large fluctuations in world commodity prices and global growth, combined with ongoing structural changes relating to globalization, this paper examines some of the key factors affecting global inflation. The paper empirically investigates various relative price and structural impacts on global inflation by: estimating a GVAR to examine how oil price shocks feed through to core and headline inflation; calculating the impact of increased imports from low-cost countries on manufacturing import prices; estimating Phillips curves in order to shed light on whether the inflationary process in the OECD countries has changed over time, particularly with respect to the roles of import prices, unit labour costs and the output gap. Overall, the paper finds that there seem to be various significant pressures on global trade prices and labour markets associated with structural factors possibly partly due to globalisation which, in addition to monetary policy, seem to be behind some of the changes in the inflation process over the period examined in this paper.Phillips Curve, inflation, output gap, import prices, unit labour costs, globalisation, monetary policy.

OAI identifier:

Suggested articles

Preview

Citations

  1. A Filardo (2007), “Globalisation and inflation: New cross-country evidence on the global determinants of domestic inflation”, Bank for International Settlements Working Paper No.
  2. (1997). A new mixing notion and functional central limit theorems for a Sieve bootstrap in time series”,
  3. (2005). An open-economy new Keynesian Phillips Curve for the UK”,
  4. (2009). Another look at global disinflation”,
  5. (2002). Are oil shocks inflationary? Asymmetric and non-linear specifications versus changes in regime”,
  6. (2007). Can domestic policies influence inflation?”, IMF Working Paper 07/257.
  7. (2008). Commodity prices and inflation dynamics”,
  8. (1997). Did the Underlying behaviour of inflation change in the 1980s? A Study of 17 countries”, Welwirtschaftliches Archiv,
  9. (1999). Estimating dynamic panel data models: a guide for macroeconomists”,
  10. Expectations and the conduct of monetary policy”,
  11. (2007). Exploring the international linkages of the euro area: a global VAR analysis”,
  12. (2008). External shocks and international inflation linkages: a Global VAR analysis”,
  13. (2009). forthcoming Globalisation and Macroeconomic Performance,
  14. (1983). Gasoline demand in the OECD: An application of pooling and testing procedures”,
  15. (2005). Global inflation”, ECB Working Paper Series, No 537, also forthcoming in Review of Economics and Statistics.
  16. (2007). Globalisation and inflation”,
  17. (2008). Globalisation and the determinants of domestic inflation”,
  18. (2006). Globalisation and the Labour Market: Trade,
  19. (2008). Globalisation, domestic inflation and global output gaps: Evidence from the euro area”,
  20. (2008). Globalisation, Trade and the Euro Area Macroeconomy,” ECB Monthly Bulletin (January). ECB (2006b), “Effects of the rising integration of low-cost countries on euro area import prices,” in Monthly Bulletin,
  21. (2005). Has inflation become harder to forecast?”,
  22. (2007). How has globalisation affected inflation?”,
  23. (2009). in Globalisation and Macroeconomic Performance edited by
  24. (2007). Instability and nonlinearity in the euro area Phillips curve”, ECB Working Paper No 811,
  25. (2004). Is China exporting deflation?”, Board of Governors of the Federal Reserve System, International Finance Discussion Papers,
  26. (1997). Is there an inflation puzzle”, Economic Policy Review, Federal Reserve Bank of
  27. (2004). Modelling regional interdependencies using a global error-correcting macroeconometric model”,
  28. (2007). Modelling the world oil market: assessment of a quarterly econometric model”,
  29. (1992). Monetary accommodation, exchange rate regimes and inflation persistence”,
  30. (2009). Oil price shocks, monetary policy and stagflation”, paper presented at University of Munster/RBA Conference on Challenges to inflation in an era of relative price shocks, March/August
  31. (2007). Oil supply news in a VAR: information from financial markets”, Banca D’Italia Working Paper no.
  32. (2008). Pass-through of external shocks along the pricing chain: a panel estimation approach fort he euro area”, paper presented at ECB workshop “International competitiveness: a European perspective”,
  33. (1997). Sieve bootstrap for time series”,
  34. (2007). Some simple tests of the globalisation and inflation hypothesis”,
  35. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations”,
  36. (2009). The economic consequences of oil shocks: differences across countries and time”, paper presented at University of Munster/RBA Conference on Challenges to inflation in an era of relative price shocks,
  37. (2007). The External Dimension of the Euro Area: Assessing the Linkages”,
  38. (2007). The external dimension of the euro area: stylised facts and initial findings”
  39. (2008). The Global Dimension of Inflation – Evidence from Factor-Augmented Phillips Curves”,
  40. (2007). The globalisation of labor”,
  41. (2009). The impact of globalisation on the euro area macroeconomy”,
  42. (2009). The impact of low-cost countries on extra-euro area import prices”, ECB internal mimeo .
  43. (2007). The International Dimension of Inflation: Evidence from Disaggregated Consumer Price Data”, Prepared for the JMCB-Fed Board Conference Domestic Prices in an Integrated World Economy,
  44. (2007). The macroeconomic effects of oil price shocks: why are the 2000s so different from the 1970s”, NBER Working Paper no.
  45. (2004). Understanding the impact of the external dimension on the euro area: trade, capital flows and other international macroeconomic linkages”, European Central Bank Occasional Paper no.
  46. (2009). What’s Behind Volatile Import Prices from China?”, Federal Reserve Bank of
  47. (2008). Will Oil Prices decline over the Long Run?”,

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.