Contents

International Inflation Synchronization and Implications

Chon, So Ra

DC Field Value Language
dc.contributor.authorChon, So Ra-
dc.date.accessioned2020-09-16T05:23:13Z-
dc.date.available2020-09-16T05:23:13Z-
dc.date.issued2020-05-
dc.identifier.urihttps://archives.kdischool.ac.kr/handle/11125/40418-
dc.description.abstractThis study analyzes global inflation synchronization and derives policy implications for the Korean economy. Unlike previous studies that assume a single global inflation factor, this study investigates if inflation in Korea can be explained further by other global inflation factors. Our principal component analysis provides three principal components for global inflation that are linked to the Korea inflation rate ― the first component is closely related to OECD inflation, and the second and third components reflect China’s inflation. This study empirically demonstrates via in-sample fitting and out-of-sample forecasting that the three principal components of global inflation play a significant role in explaining and predicting Korean inflation in the short-term, while their role is limited in the mid-term. Domestic macroeconomic variables are found to be more important for the mid-term movements of the Korean inflation rate. The empirical results here suggest that the Bank of Korea should focus more on domestic economic conditions than on global inflation when implementing monetary policy because global factors are likely to be already reflected in domestic macro-variables in the mid-term.en_US
dc.languageengen_US
dc.publisherKorea Development Instituteen_US
dc.titleInternational Inflation Synchronization and Implicationsen_US
dc.typeArticleen_US
dc.identifier.bibliographicCitationKDI Journal of Economic Policy, vol. 42, no. 2, pp. 57-84-
dc.citation.endPage84en_US
dc.citation.number2en_US
dc.citation.startPage57en_US
dc.citation.titleKDI Journal of Economic Policyen_US
dc.citation.volume42en_US
dc.identifier.doihttps://doi.org/10.23895/kdijep.2020.42.2.57-
dc.subject.keywordInflation Rates; Monetary Policy; Forecasting; Principal Component Model; LASSOen_US
Files in This Item:
    There are no files associated with this item.

Click the button and follow the links to connect to the full text. (KDI CL members only)

qrcode

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.

상단으로 이동