Inflation dynamics : expectations, structural breaks and global factors
Date
2020-08-04
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
International Centre for Economic Analysis
Abstract
There is no consensus over the importance of “global forces” on inflation. This study explores the role of structural breaks in the inflation process, and their timing, whether it is common across countries, and the extent to which ‘global forces’ are relevant. Three conclusions stand out. Global inflation impacts inflation in both AE and EME, but the impact is more heterogeneous than existing narratives have argued. One’s interpretation of global influences on domestic inflation differs, according to whether poorly performing economies in inflation terms are considered as opposed to the standard practice of examining mean inflation performance. A focus on observed inflation alone ignores that inflation expectations, including a global version of this variable, also plays a critical in inflation dynamics. Finally, there are significant spillovers in inflation between AE and EME, but these too are sensitive according to relative inflation performance. Some policy implications are also drawn.
Description
CITATION: Siklos, P. L. 2020. Inflation dynamics : expectations, structural breaks and global factors. Review of Economic Analysis, 12(2):203-233, doi:10.15353/rea.v12i2.1760.
The original publication is available at https://openjournals.uwaterloo.ca
The original publication is available at https://openjournals.uwaterloo.ca
Keywords
Inflation
Citation
Siklos, P. L. 2020. Inflation dynamics : expectations, structural breaks and global factors. Review of Economic Analysis, 12(2):203-233, doi:10.15353/rea.v12i2.1760.