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The Disappearing Openness-Inflation Relationship: A Cross-Country Analysis of Inflation Rates
Author:
Mr. M. F. Bleaney null

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Series:
IMF Working Papers
Volume/Issue:
Volume 1999: Issue 161
Language:
English
Publication Date:
01 Dec 1999
DOI:
https://doi.org/10.5089/9781451857795.001
ISBN:
9781451857795
ISSN:
1018-5941
Pages:
16
Keywords:
WP; exchange rate; regime score; GDP; inflation rate; inflation; openness; openness coefficient; openness-inflation correlation; regime regression; inflation aversion parameter; dependent variable; rate of inflation; Exchange rate arrangements; Floating exchange rates; Imports; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The robust negative correlation between openness and inflation found in cross-country data for the 1970s and 1980s has disappeared in the 1990s. There is now a strong negative correlation of inflation with per capita GDP, as higher-income countries have achieved significant disinflation not emulated by lower-income countries. Since 1973, the most consistent finding is that floating exchange rate regimes are associated with inflation rates at least 10 percent a year higher than pegged exchange rate regimes, after allowing for other factors. There is also a consistent positive correlation between land area and inflation.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund