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...
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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 |
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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 |