The Impact of Globalization on Inflation in Developing Countries

Sandeep Mazumder

Journal of Economic Development, 2017, vol. 42, issue 3, 41-60

Abstract: This paper examines the impact of globalization on inflation in developing and emerging economies. We estimate both traditional and open-economy versions of the Phillips curve for all developing economies by incorporating both domestic and foreign output gaps. We find mixed results: whether globalization has significantly affected domestic inflation in developing countries depends on the measure of inflation. Under GDP deflator inflation, there has been a significant change in the output-inflation tradeoff, but CPI inflation suggests otherwise. This highlights the importance of paying closer attention to the measure of inflation implemented, which is something that the current literature neglects to do.

Keywords: Inflation; Phillips Curve; Developing Countries (search for similar items in EconPapers)
JEL-codes: E31 F10 F30 F41 O11 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:42:y:2017:i:3:p:41-60

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