Inflation Dynamics and Global Value Chains

The global economy has witnessed a decline in inflation and an increase in inflation synchronization since the early 1980s. This paper investigates the relationship between inflation synchronization and trade integration, and documents the...

Full description

Bibliographic Details
Main Authors:	de Soyres, Francois, Franco, Sebastian
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2019
Subjects:	INFLATION GLOBAL VALUE CHAIN GLOBAL SYNCHRONIZATION TRADE INTEGRATION INFLATION SYNCHRONIZATION PRODUCTION LINKAGES INFLATION CO-MOVEMENT
Online Access:	http://documents.worldbank.org/curated/en/770701576684627744/Inflation-Dynamics-and-Global-Value-Chains http://hdl.handle.net/10986/33059

id	okr-10986-33059
recordtype	oai_dc
spelling	okr-10986-330592022-09-20T00:12:21Z Inflation Dynamics and Global Value Chains de Soyres, Francois Franco, Sebastian INFLATION GLOBAL VALUE CHAIN GLOBAL SYNCHRONIZATION TRADE INTEGRATION INFLATION SYNCHRONIZATION PRODUCTION LINKAGES INFLATION CO-MOVEMENT The global economy has witnessed a decline in inflation and an increase in inflation synchronization since the early 1980s. This paper investigates the relationship between inflation synchronization and trade integration, and documents the strong link between inflation co-movement and Global Value Chain (GVC) participation. Using 35 years and both gross and value-added trade flows, evidence shows that an increase in production linkages, as proxied by trade in intermediate inputs, is strongly associated with higher inflation correlation. Moreover, backward GVC participation is associated with an increase in bilateral inflation co-movement while forward participation is linked with a higher correlation between domestic and worldwide inflation. The paper also finds evidence of the effect of trade integration in decreasing inflation levels. 2019-12-19T17:41:14Z 2019-12-19T17:41:14Z 2019-12 Working Paper http://documents.worldbank.org/curated/en/770701576684627744/Inflation-Dynamics-and-Global-Value-Chains http://hdl.handle.net/10986/33059 English Policy Research Working Paper;No. 9090 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	INFLATION GLOBAL VALUE CHAIN GLOBAL SYNCHRONIZATION TRADE INTEGRATION INFLATION SYNCHRONIZATION PRODUCTION LINKAGES INFLATION CO-MOVEMENT
spellingShingle	INFLATION GLOBAL VALUE CHAIN GLOBAL SYNCHRONIZATION TRADE INTEGRATION INFLATION SYNCHRONIZATION PRODUCTION LINKAGES INFLATION CO-MOVEMENT de Soyres, Francois Franco, Sebastian Inflation Dynamics and Global Value Chains
relation	Policy Research Working Paper;No. 9090
description	The global economy has witnessed a decline in inflation and an increase in inflation synchronization since the early 1980s. This paper investigates the relationship between inflation synchronization and trade integration, and documents the strong link between inflation co-movement and Global Value Chain (GVC) participation. Using 35 years and both gross and value-added trade flows, evidence shows that an increase in production linkages, as proxied by trade in intermediate inputs, is strongly associated with higher inflation correlation. Moreover, backward GVC participation is associated with an increase in bilateral inflation co-movement while forward participation is linked with a higher correlation between domestic and worldwide inflation. The paper also finds evidence of the effect of trade integration in decreasing inflation levels.
format	Working Paper
author	de Soyres, Francois Franco, Sebastian
author_facet	de Soyres, Francois Franco, Sebastian
author_sort	de Soyres, Francois
title	Inflation Dynamics and Global Value Chains
title_short	Inflation Dynamics and Global Value Chains
title_full	Inflation Dynamics and Global Value Chains
title_fullStr	Inflation Dynamics and Global Value Chains
title_full_unstemmed	Inflation Dynamics and Global Value Chains
title_sort	inflation dynamics and global value chains
publisher	World Bank, Washington, DC
publishDate	2019
url	http://documents.worldbank.org/curated/en/770701576684627744/Inflation-Dynamics-and-Global-Value-Chains http://hdl.handle.net/10986/33059
_version_	1764477907673022464

Inflation Dynamics and Global Value Chains

Similar Items