The International Dimension of Inflation: Evidence from Disaggregated Consumer Price Data

Tommaso Monacelli and Luca Sala ()

Journal of Money, Credit and Banking, 2009, vol. 41, issue s1, pages 101-120

Abstract: We estimate the contribution of international common factors to the dynamics of price inflation rates of a cross-section of 948 CPI products in four OECD countries: United States, Germany, France, and United Kingdom. We find two main results. First, on average, and at least in the sample 1991-2004, one international common factor explains between 15% and 30% of the variance of consumer prices (depending on the transformation applied to the data). Given the high level of disaggregation of our panel, this estimate is best viewed as a "lower bound" for the contribution of international factors to inflation dynamics. Second, we find a strongly positive and statistically significant relationship between exposure of consumer inflation to international shocks and trade openness at the sectoral level. The latter result holds regardless of whether the original data are expressed in local as opposed to common currency. Copyright (c) 2009 The Ohio State University.

Date: 2009
View citations in EconPapers

Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1538-4616.2008.00200.x link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:mcb:jmoncb:v:41:y:2009:i:s1:p:101-120

Access Statistics for this article

Journal of Money, Credit and Banking is edited by Pok-Sang Lam, Deborah Lucas, Masao Ogaki and Kenneth D. West

More articles in Journal of Money, Credit and Banking from Blackwell Publishing
Series data maintained by Christopher F. Baum ().