March 2010 issue contents
Inflation Pressures and Monetary Policy in Global Economy

by Jordi Galí
CREI, Universitat Pompeu Fabra, and Barcelona GSE


What can estimated reduced-form inflation equations teach us regarding the role of global factors as determinants of inflation? Very little, according to modern monetary theory. I illustrate this claim by exploring the channels through which global factors influence inflation in the small open economy of Galí and Monacelli (2005).

JEL Codes: E31, F41.

Full article (PDF, 10 pages 241 kb)