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The Determinants of Non-tradables Inflation

Author

Listed:
  • David Jacobs

    (Reserve Bank of Australia)

  • Thomas Williams

    (Reserve Bank of Australia)

Abstract

This article examines the factors that explain inflation in prices of non-tradable items in the CPI. Non-tradable goods and services by definition have relatively little exposure to international competition. Consequently, their prices are more likely to be influenced by developments in the domestic economy, particularly the extent of spare capacity in both production and the labour market. A more granular breakdown of prices highlights the importance of conditions in individual markets, such as housing, as well as non-market influences on prices.

Suggested Citation

  • David Jacobs & Thomas Williams, 2014. "The Determinants of Non-tradables Inflation," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 27-38, September.
  • Handle: RePEc:rba:rbabul:sep2014-4
    as

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    File URL: https://www.rba.gov.au/publications/bulletin/2014/sep/pdf/bu-0914-4.pdf
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    References listed on IDEAS

    as
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    3. David Norman & Anthony Richards, 2010. "Modelling Inflation in Australia," RBA Research Discussion Papers rdp2010-03, Reserve Bank of Australia.
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    5. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72(6), pages 584-584.
    6. Patrick D'Arcy & David Norman & Shalini Shan, 2012. "Costs and Margins in the Retail Supply Chain," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 13-22, June.
    7. Jacqueline Dwyer & Ricky Lam, 1994. "Explaining Import Price Inflation: A Recent History of Second Stage Pass-through," RBA Research Discussion Papers rdp9407, Reserve Bank of Australia.
    8. Daan Steenkamp, 2013. "Productivity and the New Zealand Dollar: Balassa-Samuelson tests on sectoral data," Reserve Bank of New Zealand Analytical Notes series AN2013/01, Reserve Bank of New Zealand.
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    Cited by:

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    2. Cobb, Marcus P A, 2018. "Improving Underlying Scenarios for Aggregate Forecasts: A Multi-level Combination Approach," MPRA Paper 88593, University Library of Munich, Germany.

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