The Disappearing Openness-Inflation Relationship: A Cross-Country Analysis of Inflation Rates
Electronic Access:
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Summary:
The robust negative correlation between openness and inflation found in cross-country data for the 1970s and 1980s has disappeared in the 1990s. There is now a strong negative correlation of inflation with per capita GDP, as higher-income countries have achieved significant disinflation not emulated by lower-income countries. Since 1973, the most consistent finding is that floating exchange rate regimes are associated with inflation rates at least 10 percent a year higher than pegged exchange rate regimes, after allowing for other factors. There is also a consistent positive correlation between land area and inflation.
Series:
Working Paper No. 1999/161
Subject:
Exchange rate arrangements Floating exchange rates Foreign exchange Imports Inflation International trade Population and demographics Prices
English
Publication Date:
December 1, 1999
ISBN/ISSN:
9781451857795/1018-5941
Stock No:
WPIEA1611999
Pages:
16
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