Globalisation and industry concentration: What are the consequences for inflation dynamics?

Sophie Guilloux-Nefussi

Rue de la Banque, 2017, issue 45

Abstract: Since the mid-1980s, there has been a weakening of the correlation between inflation and output in advanced countries. Why? One of the prime suspects is globalisation. Aside from the well-known effects of lower wages abroad and cheaper imported goods, globalisation may also encourage concentration at home and allow the most efficient domestic firms to grow larger by accessing international markets. In addition, large companies have room to actively adjust their markup in order to keep relative prices low and preserve their market share. This strategic behaviour may have dampened the response of inflation to domestic slack over the last 30 years even if the process may have stabilised over the last decade.

Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://publications.banque-france.fr/sites/defaul ... cuments/rdb45-en.pdf (application/pdf)

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: https://EconPapers.repec.org/RePEc:bfr:rueban:2017:45

Access Statistics for this article

More articles in Rue de la Banque from Banque de France Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS. Contact information at EDIRC.
Bibliographic data for series maintained by Michael brassart ().