Globalization, Pass-Through and Inflation Dynamic
Benigno, Pierpaolo and Faia, Ester (2010) Globalization, Pass-Through and Inflation Dynamic. [Working Paper]. p. 43. Kiel Working Paper (No. 1604). (Unpublished)
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An important aspect of the globalization process is the increase in interdependence among countries through the deepening of trade linkages. This process should increase competition in each destination market and change the pricing behavior of firms. We present an extension of Dornbusch (1987)’s model to analyze the extent to which globalization, interpreted as an increase in the number of foreign products in each destination market, modifies the slope and the position of the New-Keynesian aggregate-supply equation and, at the same time, affects the degree of exchange-rate pass-through. We provide empirical evidence that supports the results of our model.
|Item Type:||Report / Paper (Working Paper)|
|Research documents and activity classification:||Working Papers > Non-Refereed Working Papers / of national relevance only|
|Divisions:||Department of Business and Management|
|MIUR Scientific Area:||Area 13 - Economics and Statistics > SECS-P/01 Political Economy|
|Deposited By:||Maria Teresa Nistico|
|Deposited On:||11 Nov 2010 14:40|
|Last Modified:||02 May 2013 22:08|
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