EVOLVING INTERNATIONAL INFLATION DYNAMICS: WORLD AND COUNTRY-SPECIFIC FACTORS

The decline in the level and persistence of inflation over the 1980s is a common feature of the most industrialized economies in the world. The rise in inflation volatility of the late 1970s and the subsequent fall of the 1980s is country specific for the UK, Canada, and, to a lesser extent, the Uni...

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Bibliographic Details
Published in:	Journal of the European Economic Association Vol. 10; no. 4; pp. 716 - 734
Main Authors:	Mumtaz, Haroon, Surico, Paolo
Format:	Journal Article
Language:	English
Published:	Malden, USA Wiley-Blackwell 01-08-2012 Blackwell Publishing Inc Oxford University Press
Subjects:	Canada Coefficients Countries E3 Economic dynamics Economic fluctuations Economic history Economic inflation Economic models Economic theory Empirical research Experimental methods Global economy Industrialization Industrialized nations Inflation Inflation rates Inflation theory International economics Italy Japan Monetary policy Productivity growth Stochastic models Studies U.S.A
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Summary:	The decline in the level and persistence of inflation over the 1980s is a common feature of the most industrialized economies in the world. The rise in inflation volatility of the late 1970s and the subsequent fall of the 1980s is country specific for the UK, Canada, and, to a lesser extent, the United States, Italy, and Japan. Since the late 1980s, inflation predictability has declined significantly across the industrialized world. We link the empirical results to recent theories of international inflation.
Bibliography:	The editor in charge of this paper was Fabio Canova. Acknowledgments: We are grateful to Peter Andrews, Luca Benati, Gianluca Benigno, Tim Besley, Antonello D’Agostino, Martin Ellison, Luca Gambetti, Thomas Lubik, Benoit Mojon, Giorgio Primiceri, James Proudman, Christoph Schleicher, Saverio Simonelli, Vanessa Smith, Garry Young, and seminar participants in many conferences and seminars for useful suggestions. Special thanks to Fabio Canova, the Editor, and three anonymous referees for detailed comments which greatly improved the quality of the paper. Annalisa Heath and Mark MacDonald provided excellent research assistance. The paper is best viewed in color. The views expressed in this paper are those of the authors, and do not necessarily reflect those of the Bank of England or the Monetary Policy Committee. Paolo Surico is a member of the CEPR. ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23
ISSN:	1542-4766 1542-4774
DOI:	10.1111/j.1542-4774.2012.01068.x