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Title: International Trade and the Connection Between Excess Demand and Inflation
Authors: Nault, Barrie R
Dexter, Albert S.
Levi, Maurice D.
Keywords: Globalization;International trade;Consumption (Economics);Demand (economic theory);Supply & Demand;Inflation (Finance)
Issue Date: Sep-2005
Publisher: Wiley
Citation: Dexter, A.S., M. D. Levi and Nault, B.R., "International Trade and the Connection Between Excess Demand and Inflation", Review of International Economics, 13, 4 (September 2005), 699-708.
Abstract: This paper demonstrates that globalization, taking the form of a higher import component of consumption and a larger export component of GDP, is the cause of the apparent breakdown in the relationship between excess demand and inflation. Within a parsimonious empirical framework, we show that increasing openness of the US economy is all that is needed to re-establish the relationship between inflation and capacity utilization. We also show that international trade has a significant separate influence on inflation, and is important for identifying a Phillips curve relationship between unemployment and inflation.
Description: author can archive pre-print (ie pre-refereeing). Publisher source must be acknowledged with citation. Must link to publisher version with set statement (see policy)
ISSN: 0965-7576
Appears in Collections:Nault, Barrie R

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