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Globalisation effect on inflation in the great moderation era: new evidence from G10 countries

Duo Qin and Xinhua He

MPRA Paper from University Library of Munich, Germany

Abstract: The effect of globalisation on inflation is modelled and simulated for ten countries from G10 during the Great Moderation period. The results are supportive of the globalisation hypothesis. In particular, the results show that dynamic channels and magnitudes of globalisation to domestic inflation are highly heterogeneous from country to country, that increases in trade openness could be either inflationary or deflationary, while increased imports from low-cost emerging-market economies have been mostly deflationary, and that there has been 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 shown to have contributed positively to the aspect of low inflation rather than that of stable inflation during the Great Moderation era.

Keywords: Inflation dynamics; globalisation (search for similar items in EconPapers)
JEL-codes: C52 E31 E37 F41 (search for similar items in EconPapers)
Date: 2011-08-26
New Economics Papers: this item is included in nep-cwa, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Globalisation effect on inflation in the Great Moderation era: New evidence from G10 countries (2013) Downloads
Working Paper: Globalisation effect on inflation in the great moderation era: New evidence from G10 countries (2012) Downloads
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