Has greater globalization made forecasting inflation more difficult?

U.S. inflation and real economic activity became more difficult to forecast during the Great Moderation. We investigate the possibility that the decline in the ability to forecast inflation may be due to greater globalization. As countries become more integrated through trade and financial flows, domestic inflation has a larger foreign component that is determined by variables typically excluded from forecasts.

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Year of publication:	2009
Authors:	Wynne, Mark A. ; Roy, Patrick
Published in:	Economic Letter. - Federal Reserve Bank of Dallas. - Vol. 4.2009, 5
Publisher:	Federal Reserve Bank of Dallas
Subject:	Forecasting \| Inflation (Finance) \| Globalization \| International trade

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Extent:	application/pdf
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005065511