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Paper Information

Journal:   IRANIAN JOURNAL OF ECONOMIC STUDIES   SPRING 2012 , Volume 1 , Number 1; Page(s) 29 To 53.
 
Paper: 

THE EFFECTS OF OPENNESS AND GLOBALIZATION ON INFLATION: AN ARDL BOUNDS TEST APPROACH

 
 
Author(s):  JAFARI SAMIMI AHMAD*, GHADERI SAMAN, SANGINABADI BAHRAM
 
* UNIVERSITY OF MAZANDARAN, BABOLSAR
 
Abstract: 

The purpose of this paper is to test the hypothesis first proposed by Romer (1993), suggesting that inflation is lower in more open economies. According to this hypothesis, central banks have a lower incentive to engineer surprise inflations in more-open economies because the Phillips curve is steeper. Furthermore, Comparing with other empirical studies, this paper has used the new KOF globalization index to estimate the relationship between economic globalization and inflation. We utilized the ARDL Bounds test approach to level relationship proposed by Pesaran et al. (2001) for Iranian annual data during 1970-2009. The results from Bounds test approach confirm the existence of the long-run relationship among the variables for both specification. The results show that openness has a negative and significant effect on inflation in short-run but its effect on inflation in long-run is positive. Globalization has a negative and significant effect on inflation in short-run and long-run. Thus, it seems that the new economic globalization (KOF index) which is a broader comprehensive index is a better proxy of openness.

 
Keyword(s): OPENNESS, ECONOMIC GLOBALIZATION, INFLATION, IRAN
 
 
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Citations: 
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APA: Copy

JAFARI SAMIMI, A., & GHADERI, S., & SANGINABADI, B. (2012). THE EFFECTS OF OPENNESS AND GLOBALIZATION ON INFLATION: AN ARDL BOUNDS TEST APPROACH. IRANIAN JOURNAL OF ECONOMIC STUDIES, 1(1), 29-53. https://www.sid.ir/en/journal/ViewPaper.aspx?id=275763



Vancouver: Copy

JAFARI SAMIMI AHMAD, GHADERI SAMAN, SANGINABADI BAHRAM. THE EFFECTS OF OPENNESS AND GLOBALIZATION ON INFLATION: AN ARDL BOUNDS TEST APPROACH. IRANIAN JOURNAL OF ECONOMIC STUDIES. 2012 [cited 2021July31];1(1):29-53. Available from: https://www.sid.ir/en/journal/ViewPaper.aspx?id=275763



IEEE: Copy

JAFARI SAMIMI, A., GHADERI, S., SANGINABADI, B., 2012. THE EFFECTS OF OPENNESS AND GLOBALIZATION ON INFLATION: AN ARDL BOUNDS TEST APPROACH. IRANIAN JOURNAL OF ECONOMIC STUDIES, [online] 1(1), pp.29-53. Available: https://www.sid.ir/en/journal/ViewPaper.aspx?id=275763.



 
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