Domestic inflation influenced by global factors

Common shocks, similar policy reactions, international trade and financial links are significant common components in global inflation rates, finds a paper from the St Louis Federal Reserve.

World factors explain 34% of inflation variability on average across the 65 countries studied, while regional factors explain just 16%.

The authors also find that as countries become more open and developed, and improve the quality of their institutions, international factors have a greater impact on national

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