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

Arbeitspapier

Dynamic econometric models are carefully built to analyse counterfactually the globalisation effect on inflation for ten countries from G10 during the Great Moderation period. The main findings are (i) the effect is highly heterogeneous from country to country; (ii) increases in trade openness could be either inflationary or deflationary whereas increased imports from low-cost emerging-market economies are mostly deflationary; and (iii) there is 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 found to have contributed positively to lowering rather than stabilising inflation during the Great Moderation era.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Economics Discussion Papers ; No. 2012-56

Classification and Topics

• Classification: Wirtschaft ; Model Evaluation, Validation, and Selection ; Price Level; Inflation; Deflation ; Prices, Business Fluctuations, and Cycles: Forecasting and Simulation: Models and Applications ; Open Economy Macroeconomics
• Subject: inflation dynamics ; globalisation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Qin, Duo ; He, Xinhua
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/66139
• Last update: 10.03.2025, 11:45 AM CET