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The Impact of Globalization on Inflation in Developing Countries

Author

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  • Sandeep Mazumder

    (Wake Forest University)

Abstract

This paper examines the impact of globalization on inflation in developing and emerging economies. We estimate both traditional and open-economy versions of the Phillips curve for all developing economies by incorporating both domestic and foreign output gaps. We find mixed results: whether globalization has significantly affected domestic inflation in developing countries depends on the measure of inflation. Under GDP deflator inflation, there has been a significant change in the output-inflation tradeoff, but CPI inflation suggests otherwise. This highlights the importance of paying closer attention to the measure of inflation implemented, which is something that the current literature neglects to do.

Suggested Citation

  • Sandeep Mazumder, 2017. "The Impact of Globalization on Inflation in Developing Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 42(3), pages 41-60, September.
    • Handle: RePEc:jed:journl:v:42:y:2017:i:3:p:41-60
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Inflation; Phillips Curve; Developing Countries;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F10 - International Economics - - Trade - - - General
    • F30 - International Economics - - International Finance - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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