Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/185535
Authors: 
Jašová, Martina
Moessner, Richhild
Takáts, Előd
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 7337
Abstract: 
We study how domestic and global output gaps affect CPI inflation. We use a New-Keynesian Phillips curve framework which controls for nonlinear exchange rate movements for a panel of 26 advanced and 22 emerging economies covering the 1994Q1-2017Q4 period. We find broadly that both global and domestic output gaps are significant drivers of inflation both in the pre-crisis (1994-2008) and post-crisis (2008-2017) periods. Furthermore, after the crisis, in advanced economies the effect of the domestic output gap declines, while in emerging economies the effect of the global output gap declines. The paper demonstrates the usefulness of the New Keynesian Phillips curve in identifying the impact of global and domestic output gaps on inflation.
Subjects: 
output gaps
global factors
inflation
JEL: 
E31
E58
F62
Document Type: 
Working Paper

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