Working Paper: NBER ID: w4438
Authors: Jose De Gregorio; Alberto Giovannini; Holger C. Wolf
Abstract: Using 1970-1985 sectoral data for the OECD we find that inflation in nontradable goods is higher than in tradables, We identify a demand shift towards nontradables and faster growth of total factor productivity in the tradable goods sector as the prime causes of higher nontradables inflation. In addition. disinflation attempts and the exchange rate regime appear to have had significant influence on the relative inflation rate.
Keywords: Inflation; Tradables; Nontradables; Exchange Rate; OECD
JEL Codes: E31; F41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| productivity growth in the tradable sector (O49) | inflation rates in nontradables (E31) |
| demand shift towards nontradables (F29) | inflation rates in nontradables (E31) |
| exchange rate regime (F33) | inflation rates (E31) |
| disinflation attempts (E31) | inflation rates (E31) |
| productivity growth in the tradable sector (O49) | relative prices (P22) |
| demand shift towards nontradables (F29) | production and consumption patterns (E20) |