Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/298411 
Year of Publication: 
2022
Series/Report no.: 
Discussion paper No. 153
Publisher: 
Aboa Centre for Economics (ACE), Turku
Abstract: 
This paper examines the reasons for the declining path of inflation since the 1970s. In particular, it focusses on the role of globalization - covering both changes in the global market structure and technical and structural developments in trade and production. In addition, the paper deals with changes in the basic transmission mechanisms of price and wage inflation. The paper makes use of different data from individual countries and panel of countries. These data show that the dispersion of inflation and the behavior of relative prices follow a pattern that is consistent with several globalization indicators. Also estimation results show that these indicators are useful in tracing the developments of trend inflation after the 1960s. Moreover, it is shown that the basic relationships between prices and costs are nonlinear depending on the level of inflation.
Subjects: 
Inflation
globalization
Phillips curve
trade unions
JEL: 
E31
E52
E58
F02
F41
F42
F62
Document Type: 
Working Paper

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