TITLE:
Fall and Convergence of World Inflation Rates (1998-2019)
AUTHORS:
Wilman Gómez Muñoz, Carlos Esteban Posada, Remberto Rhenals
KEYWORDS:
Inflation, Convergence, Open Economy, Monetary Policy, VECM, Panel Data
JOURNAL NAME:
Modern Economy,
Vol.14 No.3,
March
31,
2023
ABSTRACT: The trend observed from 1998 until 2019 over world disinflation and over
the stabilization of national inflations at low levels is due to the behavior
of US inflation. This can be said in the light of econometric results with
quarterly US figures and other 30 countries
of different continents. Indeed, these results favor such a hypothesis
and do not favor alternative hypotheses that would
emphasize the national monetary policies or deflationist shocks of “real”
origin (non-monetary). Besides, the empirical evidence indicates that, in
general terms, national monetary policies have been lax in this sense: monetary
policy makers have taken advantage of the disinflationary trend from the US to
execute lax policies by foreseeing related benefits (over the economic
activity, for instance).