Global Inflation: The Role of Food, Housing and Energy Prices
41 Pages Posted: 24 Feb 2017
Date Written: February 23, 2017
This paper studies the role of global factors in causing common movements in consumer price inflation, with particular focus on the food, housing and energy sub-indices. It uses a comprehensive dataset of 223 countries and territories collected from national and international sources. Global factors explain a large share of the variance of national inflation rates for advanced countries ─ and more generally those with greater GDP per capita, financial development and central bank transparency ─ but not for middle and low income countries. Common factors explain a large share of the variance in food and energy prices.
Keywords: global inflation, common factor, food prices, energy prices
JEL Classification: E31, E52, F42
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