Arbeitspapier
The Globalisation of Inflation: The Growing Importance of Global Value Chains
Greater international economic interconnectedness over recent decades has been changing inflation dynamics. This paper presents evidence that the expansion of global value chains (GVCs), ie cross-border trade in intermediate goods and services, is an important channel through which global economic slack influences domestic inflation. In particular, we document the extent to which the growth in GVCs explains the established empirical correlation between global economic slack and national inflation rates, both across countries and over time. Accounting for the role of GVCs, we also find that the conventional trade-based measures of openness used in previous studies are poor proxies for this transmission channel. The results support the hypothesis that as GVCs expand, direct and indirect competition among economies increases, making domestic inflation more sensitive to the global output gap. This can affect the trade-offs that central banks face when managing inflation.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 6387
- Klassifikation
-
Wirtschaft
Price Level; Inflation; Deflation
Monetary Policy
Central Banks and Their Policies
International Economic Order and Integration
Open Economy Macroeconomics
International Policy Coordination and Transmission
Empirical Studies of Trade
Economic Impacts of Globalization: Macroeconomic Impacts
- Thema
-
globalization
inflation
Phillips curve
monetary policy
global value chain
production structure
international inflation synchronisation
input-output linkages
supply chain
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Auer, Raphael A.
Borio, Claudio
Filardo, Andrew
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2017
- Handle
- Letzte Aktualisierung
- 10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Auer, Raphael A.
- Borio, Claudio
- Filardo, Andrew
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2017
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