Global Slack as a Determinant of U.S. Inflation
Posted: 14 Jul 2021
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Global Slack as a Determinant of U.S. Inflation
Globalization and Monetary Policy Institute Working Paper No. 123
Posted: 14 Jul 2021
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Global Slack as a Determinant of U.S. Inflation
Bank for International Settlements, 2013. "Globalisation and inflation dynamics in Asia and the Pacific," BIS Papers, Bank for International Settlements, number 70, May.
Number of pages: 6
Posted: 09 Dec 2013
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Date Written: 2012
Abstract
Resource utilization, or \\"slack,\\" is widely held to be an important determinant of inflation dynamics. As the world has become more globalized in recent decades, some have argued that the concept of slack that is relevant is global rather than domestic (the \\"global slack hypothesis\\"). This line of argument is consistent with standard New Keynesian theory. However, the empirical evidence is fragile, at best, possibly because of a disconnect between empirical and theory-consistent measures of output gaps.
Suggested Citation: Suggested Citation
Martinez-Garcia, Enrique and Wynne, Mark A., Global Slack as a Determinant of U.S. Inflation (2012). Globalization and Monetary Policy Institute Working Paper No. 123, Available at SSRN: https://ssrn.com/abstract=3885377
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