Real Globalisation and Price Spillovers in Asia and the Pacific

Abstract

In economies and sectors tightly connected by trade linkages, the increased use of intermediate imported inputs could be expected to lead to greater transmission of cross-border cost shocks. This paper presents some results from on-going research investigating cross-border price spillovers to sectoral producer prices within the Asian manufacturing supply chain (Auer and Mehrotra, 2014). Our results suggest that real integration through the supply chain matters for domestic price dynamics.

Full publication: Globalisation, Inflation and Monetary Policy in Asia and the Pacific

Keywords: globalisation, inflation, Asian manufacturing supply chain, price spillovers

JEL Classification: E31, F62, F14