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Journal Article
Research Spotlight: Hidden Effects of Global Trade
Economists have long studied the parallel movement of inflation and output growth. But although this correlation occurs in the data as strongly across countries as within, standard models in macroeconomics tend to focus only on inflation-output relationships within countries, perhaps because most large countries purchase roughly 80 percent of goods domestically. Nonetheless, economic disturbances are not confined within the country where they originate; they propagate throughout that country's trading network as both its immediate trading partners and trading partners of trading partners ...