An international perspective on the recent behavior of inflation
Pierangelo De Pace () and
Review, 2014, vol. 96, issue 3, 267-294
Several commentators have been concerned about the possibility that the euro area may be experiencing disinflation with the risk of deflation. However, the euro area is not the only economy navigating the risky waters of low inflation. Several other advanced economies have recently experienced below-target inflation as well as some actual deflation. In this article, the authors collect data for nine advanced economies and document several facts about the behavior of inflation during the 2002-14 period. First, they show that the relationship between inflation rates and short-term rates displays similar changes across advanced economies?with and without central bank programs designed to increase the size of their balance sheets (e.g., large-scale asset purchases). Second, they describe recent indications that headline and core inflation are below target for individual countries. They then discuss various explanations for this trend (global factors, output gaps, and changes in inflation expectations), showing there is some important heterogeneity across countries. Finally, they show that while output has become even more synchronized across countries since 2008, the cross-country correlation of inflation is no longer higher than the cross-country correlation of output.
JEL-codes: E31 E43 F42 F44 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
https://files.stlouisfed.org/files/htdocs/publicat ... 2014/q3/contessi.pdf Full text (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlrv:00028
Ordering information: This journal article can be ordered from
Access Statistics for this article
More articles in Review from Federal Reserve Bank of St. Louis Contact information at EDIRC.
Bibliographic data for series maintained by Anna Oates ().