Inflation dynamics have been difficult to explain over the last decade. This paper explores if a more comprehensive … treatment of globalization can help. CPI inflation has become more synchronized around the world since the 2008 crisis, but core … and wage inflation have become less synchronized. Global factors (including commodity prices, world slack, exchange rates …

has evolved to study inflation in Japan. Our key finding is that labor market dynamics shifted after 1998 so that … relationship between wages and prices, so wage inflation has become a much less important determinant of price inflation …

) a persistent and hump-shaped response of inflation to a monetary policy shock, (ii) a large and persistent response of … shock, (v) non-inertial responses of inflation to non-monetary shocks, and (vi) a negative unconditional autocorrelation of … the first difference of inflation that is consistent with the data. A medium-scale model relying on backward indexation of …

short-run and long-run inflation expectations. The estimated model allows us to analyze the direct and indirect effects of … product-market and labor-market shocks on prices and nominal wages and to quantify the sources of U.S. pandemic-era inflation … and wage growth. We find that, contrary to early concerns that inflation would be spurred by overheated labor markets …