Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264939 
Year of Publication: 
2021
Series/Report no.: 
Working Paper No. 17/2021
Publisher: 
Norges Bank, Oslo
Abstract: 
Since 2000 U.S. inflation has remained both below target and silent to domestic slack and monetary interventions. A trend-cycle BVAR decomposition explores the role of imported intermediate goods in explaining the puzzling behaviour of inflation. The trend analysis shows that, starting from the '90s, despite very well-anchored expectations, slow-moving imported "cost-push" factors induced deflationary pressure keeping trend inflation below target. The cycle block provides evidence in favour of a flattening of the Phillips curve, mainly attributable to a weaker wage pass-through. The business cycle behaviour of inflation is determined by a shock originating abroad, which indeed generates the main bulk of volatility in the international prices of intermediate goods and is poorly connected to the domestic slack.
Subjects: 
Trend-Cycle Decomposition
Trend Inflation
Global Inflation
Phillips Curve
JEL: 
C11
C32
E3
E31
E52
Persistent Identifier of the first edition: 
ISBN: 
978-82-8379-216-4
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.