This paper analyses how globalization has affected inflation in the New EU Members States (NMS), and Poland in particular, since 1995. It finds prices have become less sensitive to domestic economic conditions as trade integration rose, possibly because monetary policy incentives increasingly shifted toward meeting price stability objectives. Quantitatively, globalization appears to have lowered Polish prices by A½ to 1 percentage point annually since 1995, substantially more than in advanced economies. However, future inflation-dampening effects in the NMS are likely to be smaller as the pace of increases in trade openness moderates.Food and transport prices have been the main drivers of price deceleration since early 2005: Out of the 2.9 ... of early 2005, while the Russian and Ukrainian bans on Polish food exports have been dampening domestic prices since end-2005, anbsp;...
|Title||:||Inflation in Poland: How Much Can Globalization Explain? (EPub)|
|Publisher||:||International Monetary Fund - 2007-02-01|