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- W2564751572 abstract "This paper shows the way how persistent world inflation shocks hitting a small open economy can re-weight the importance of domestic and foreign factors in the determination of prices. In this sense, we study why the recently observed global disinflation environment may imply a weakening of the standard interest rate channel of monetary policy to affect inflation. We derive a state-dependent Phillips curve based on translog preferences that make the elasticity of substitution of domestic goods sensitive to foreign prices. With this approach we are able to replicate the dragging effect of global disinflation on domestic inflation, as experienced in small open economies such as New Zealand, Chile and Peru." @default.
- W2564751572 created "2017-01-06" @default.
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- W2564751572 date "2004-01-01" @default.
- W2564751572 modified "2023-09-27" @default.
- W2564751572 title "The Dragging Effect of World Inflation in Small Open Economies" @default.
- W2564751572 hasPublicationYear "2004" @default.
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