International Evidenceon Tradables and Nontradables Inflation

ByHolger C. Wolf, Alberto Giovannini, Jose De Gregorio

March 1, 1994

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Using 1970-85 sectoral data for the OECD we find that inflation in nontradable good exceeds inflation 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 the differential inflation. In addition, disinflation attempts and the exchange rate regime appear to have exerted significant influence on the relative inflation rate.

Subject: Exchange rate arrangements, Expenditure, Foreign exchange, Income, Inflation, National accounts, Prices, Production, Productivity, Total factor productivity

Keywords: core EMS economy, Europe, exchange rate, Exchange rate arrangements, Income, Inflation, nontradable goods, oil price increase, Productivity, relative price, sector result, supply curve, Total factor productivity, WP

Pages:
36
Volume:
1994
DOI:
https://doi.org/10.5089/9781451979282.001
Issue:
033
Series:
Working Paper No. 1994/033
Stock No:
WPIEA0331994
ISBN:
9781451979282
ISSN:
1018-5941

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Notes

Study based on 1970-84 sectoral data for the OECD.

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