A working paper published by the Bank for International Settlements on January 10 presents fresh evidence on the effects of global factors on inflation.
Authors Güneş Kamber and Benjamin Wong make use of an empirical model to pin down global factors’ temporary (gap) and longer-term (trend) effects on inflation. Starting with five advanced-economy inflation targeters, they show global factors tend to impact the inflation gap rather than the trend, with commodity price shocks particularly importa
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