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Working Paper
Trade linkages and the globalisation of inflation in Asia and the Pacific
Some observers argue that increased real integration has led to greater co-movement of prices internationally. We examine the evidence for cross-border price spillovers among economies participating in the pan-Asian cross-border production networks. Starting with country-level data, we find that both producer price and consumer price inflation rates move more closely together between those Asian economies that trade more with one another, ie that share a higher degree of trade intensity. Next, using a novel data set based on the World Input-Output Database (WIOD), we examine the importance of ...
Briefing
How Persistent Is Inflation?
As inflation has risen during the past year, it is natural to ask: "How long will this period of high inflation last?" This question is important to households and firms forming expectations about the future, as well as policymakers deciding what actions to take against rising prices. In this Economic Brief, we provide a framework for thinking about inflation and conduct an analysis concerning the persistence of contemporaneous shocks that move price levels. In recent decades, the persistence of inflation has been low, especially when compared to the high inflation of the late 1970s and early ...
Working Paper
Inflation targeting and the anchoring of inflation expectations: cross-country evidence from consensus forecasts
Using survey data of inflation expectations across a 36 developed and developing countries, this paper examines whether the adoption of inflation targeting has helped to anchor inflation expectations. We examine the response of inflation expectations following a shock to inflation, inflation expectations, and oil prices. For the 13 countries that adopted inflation targeting midway through the time period used in this study, there is a significant difference in the responses between the earlier and the later subperiods. A shock leads to a positive, significant, and persistent increase ...