During the 1990s, many OECD countries had declining rates of inflation while their unemployment rates were also falling, something that on the surface seemed at odds with the Phillips curve relationship between inflation and unemployment. For the USA, these seemingly contradictory developments...

This paper evaluates the hypothesis that globalization has increased the role of international factors and decreased the role of domestic factors in the inflation process in industrial economies. Towards that end, we estimate standard Phillips curve inflation equations for 11 industrial...