Flattening of the Short-run Trade-off between Inflation and Domestic Activity: The Analytics of the Effects of Globalization

• Published in: IDEAS Working Paper Series from RePEc
• Main Authors: Razin, Assaf, Binyamini, Alon
• Format: Paper
• Language: English
• Published: St. Louis Federal Reserve Bank of St. Louis 01.01.2007
• Subjects: Globalization; Phillips curve

This paper reviews the analytics of the effects of globalization on the Phillips curve and the utility-based objective function of the central bank. It demonstrates that in an endogenous-policy set up, when trade in goods is liberalized, financial openness increases, and in- and out-labor migration...