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- W1569243146 abstract "Trade openness can affect inflation volatility via the incentives faced by policymakersor the structure of production and consumption, but the sign of this effect, aspredicted from economic theory, is ambiguous. This paper provides evidence for anegative effect of openness on inflation volatility using a dynamic panel model thatcontrols for the endogeneity of openness and the effects of both average inflation andthe exchange rate regime. Our results offer one explanation for the recent decline ininflation volatility observed in many countries. The relationship is shown to bestrongest amongst developing and emerging market economies, and we argue that themechanisms linking openness and inflation volatility are likely to be strongestamongst this group of countries.Keywords:" @default.
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- W1569243146 date "2005-03-15" @default.
- W1569243146 modified "2023-09-24" @default.
- W1569243146 title "Openness and inflation volatility: cross-country evidence." @default.
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