Federal Reserve Bank of Dallas
Globalization Institute Working Papers
Globalization and inflation in Europe
What is the impact of import competition from other low-wage countries (LWCs) on inflationary pressure in Western Europe? This paper seeks to understand whether labor-intensive exports from emerging Europe, Asia, and other global regions have a uniform impact on producer prices in Germany, France, Italy, Sweden, and the United Kingdom. In a panel covering 110 (4-digit) NACE industries from 1995 to 2008, IV estimates predict that LWC import competition is associated with strong price effects. More specifically, when Chinese exporters capture 1 percent of European market share, producer prices decrease about 2 percent. In contrast, no effect is present for import competition from low-wage countries in Central and Eastern Europe.
Cite this item
Raphael Auer & Kathrin Degen & Andreas M. Fischer, Globalization and inflation in Europe, Federal Reserve Bank of Dallas, Globalization Institute Working Papers 65, 2010.
Note: Published as: Auer, Raphael, Kathrin Degen and Andreas M. Fischer (2013), "Low-wage Import Competition, Inflationary Pressure, and Industry Dynamics in Europe," European Economic Review 59: 141-166.
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
This item with handle RePEc:fip:feddgw:65
is also listed on EconPapers
For corrections, contact Amy Chapman ()