Globalisation and the Slope of the Phillips Curve
CESifo, Munich, 2021
CESifo Working Paper No. 9383
![](https://cesifo.org/DocImg/cesifo1_wp9383.jpg?c=1689236998)
We study the effects of globalisation on the slope of the New Keynesian Phillips curve for CPI inflation, based on a broad panel of 35 countries and controlling for possibly non-linear exchange rate effects. We find that the output gap generally has a significant positive effect on inflation, but that this effect decreases as integration in the global economy increases. We conclude that the advance of globalisation has been a key force behind the flattening of price Phillips curves across the world.