Global Imbalances and Imported Disinflation in the Euro Area

Barthélemy, Jean; Cléaud, Guillaume

doi:10.2139/ssrn.1855653

SSRN Journal

2011

DOI: 10.2139/ssrn.1855653

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Global Imbalances and Imported Disinflation in the Euro Area

Jean Barthélemy

Guillaume Cléaud

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Cited by 15 publications

References 43 publications

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The Non-Monetary Side of the Global Disinflation

Schwerhoff

2013

Open Econ Rev

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The dramatic decline in inflation across the world over the last 20 years has been largely credited to improved monetary policy. The universal nature of the phenomenon and its simultaneity with globalization however indicate that there might also be a "real" side to it. We build a model based on Melitz (2003) in which falling transport cost lead to greater openness, higher productivity and lower inflation. Following a decline in transport cost openness increases and firm selection eliminates the least productive domestic firms.The consequent increase in average productivity leads to falling relative prices for goods.A cash-in-advance constraint allows to analyse how falling relative prices can lead to lower inflation. Using a dataset of macroeconomic variables for 107 countries from all world regions we are able to show that openness-induced productivity growth leads to a significant decline in inflation world wide.JEL classification: F15, F41, E31

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The Non-Monetary Side of the Global Disinflation

Schwerhoff

2013

Open Econ Rev

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Global Imbalances and Imported Disinflation in the Euro Area

Barthélemy

Cléaud

2011

SSRN Journal

Self Cite

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Stock Prices and Monetary Policy Shocks: A General Equilibrium Approach

Challe

Giannitsarou

2011

SSRN Journal

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Abstract. Recent empirical literature documents that unexpected changes in the nominal interest rates have a signi…cant e¤ect on real stock prices: a 25-basis point increase in the nominal interest rate is associated with an immediate decrease in broad real stock indices that may range from 0.6 to 2.2 percent, followed by a gradual decay as real stock prices revert towards their long-run expected value. In this paper, we assess the ability of a general equilibrium New Keynesian asset-pricing model to account for these facts. The model we consider is a production economy with elastic labor supply, staggered price and wage setting, as well as time-varying risk aversion through habit formation. We …nd that the model predicts a stock market response to policy shocks that matches empirical estimates, both qualitatively and quantitatively. Our …ndings are robust to a range of variations and parameterizations of the model.

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Global Imbalances and Imported Disinflation in the Euro Area

Cited by 15 publications

References 43 publications

The Non-Monetary Side of the Global Disinflation

The Non-Monetary Side of the Global Disinflation

Global Imbalances and Imported Disinflation in the Euro Area

Stock Prices and Monetary Policy Shocks: A General Equilibrium Approach

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