Global Inflation Synchronization
The paper studies the extent of global inflation synchronization using a dynamic factor model in a large set of countries over a half century. The authors' methodology allows them to account for differences across groups of countries (advanced...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/733211551994244422/Global-Inflation-Synchronization http://hdl.handle.net/10986/31394 |
| Summary: | The paper studies the extent of global
inflation synchronization using a dynamic factor model in a
large set of countries over a half century. The
authors' methodology allows them to account for
differences across groups of countries (advanced economies
and emerging market and developing economies) and to analyze
commonalities in inflation synchronization across a wide
range of inflation measures. The paper reports three major
results. First, inflation movements have become increasingly
synchronized internationally over time: a common global
factor has accounted for about 22 percent of variation in
national inflation rates since 2001. Second, inflation
synchronization has also become more broad-based: while it
was previously much more pronounced among advanced economies
than among emerging market and developing economies, it has
become substantial in both groups over the past two decades.
In addition, inflation synchronization has become
significant across all inflation measures since 2001,
whereas it was previously prominent only for inflation
measures that included mostly tradable goods. |
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