Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53886
Authors: 
Côté, Denise
De Resende, Carlos
Year of Publication: 
2008
Series/Report no.: 
Bank of Canada Working Paper 2008,35
Abstract: 
In this paper, we develop a theoretical model which identifies four channelsimport prices, competition with domestic suppliers and workers, and commodity pricesthrough which priceand wage-setting conditions in country j may affect inflation in country i. We estimate a dynamic inflation equation derived from the theoretical model using a quarterly dataset of eighteen OECD countries over the 1984-2006 period. Although our methodology can be applied to any pair of countries, we focus on the effect of China on the inflation rate of other countries. Our results suggest that while China's negative effect on global inflation has been quantitatively modest, it has increased in absolute terms since the early 2000s. We also find evidence that, for most countries examined, competition with domestic suppliers has been the most important channel.
Subjects: 
International topics
JEL: 
E22
E32
E44
Document Type: 
Working Paper

Files in This Item:
File
Size
704.46 kB





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