Inflation and Globalisation: A Modelling Perspective

10 Pages Posted: 14 Apr 2013

See all articles by Charles M. Engel

Charles M. Engel

University of Wisconsin - Madison - Department of Economics; National Bureau of Economic Research (NBER); University of Washington - Department of Economics

Date Written: February 1, 2013

Abstract

This paper examines some standard open-economy New Keynesian models to address the question of how globalisation affects the inflation process. Specifically, it investigates how the Phillips curve for consumer price inflation in a country is affected by openness, and how the optimal choice of monetary policy is influenced by openness. The paper compares models that assume producer currency pricing with ones that assume local currency pricing. It also considers the role of financial market completeness.

Full publication: Globalisation and Inflation Dynamics in Asia and the Pacific

Keywords: open-economy Phillips curve, monetary policy, exchange rate policy

JEL Classification: F41, F42, E61

Suggested Citation

Engel, Charles M., Inflation and Globalisation: A Modelling Perspective (February 1, 2013). BIS Paper No. 70k, Available at SSRN: https://ssrn.com/abstract=2248790

Charles M. Engel (Contact Author)

University of Wisconsin - Madison - Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706
United States
608-262-3697 (Phone)
608-262-2033 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Washington - Department of Economics ( email )

Box 353330
Seattle, WA 98195-3330
United States
206-543-6197 (Phone)
206-685-7477 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
173
Abstract Views
1,169
Rank
312,664
PlumX Metrics