Globalization and Inflation: A Swiss Perspective
| Autor: | John A. Tatom |
|---|---|
| Rok vydání: | 2013 |
| Předmět: |
Inflation
Economics and Econometrics media_common.quotation_subject Monetary economics German Globalization 0502 economics and business European integration Economics 050207 economics Price of stability Real interest rate media_common 050208 finance Inflation targeting 05 social sciences Perspective (graphical) Monetary policy jel:E32 International economics jel:E31 language.human_language Inflation Globalization Switzerland GDP gap language Misery index jel:F4 |
| Popis: | Globalization has given rise to new concerns that domestic inflation is caused by global developments, especially in the state of the global gap in GDP and resource utilization, and whether domestic monetary policy can control it. This paper explores the role of globalization, if any, for inflation, particularly in Switzerland, one of the smallest and most open economies where the globalization hypothesis should be most relevant, but where inflation historically has been among the lowest in the world. Is Switzerland and Swiss monetary policy unique in providing a benchmark for price stability, or is Swiss inflation performance an accident, with Swiss inflation being dictated by global experience or at least by its larger neighbors? It provides tests of whether inflation in Switzerland is causally related to inflation elsewhere. It focuses in more detail on Swiss inflation in a P* model and on whether it is also influenced by inflation in Germany, other countries or by inflation abroad via an import channel. Finally, the paper looks more broadly at other evidence of whether Swiss inflation or that in other industrial countries is influenced by globalization. Swiss inflation is largely made at home. There is evidence presented of a cointegrating relationship of Swiss and German inflation, but this and the high correlation of Swiss and German inflation are more likely due to common inflation objectives. |
| Databáze: | OpenAIRE |
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