Inflation in Barbados is mainly imported. But how are external shocks transmitted to the domestic economy? Shouldn't there be also a domestic component, albeit very small, given the presence of capital controls? We focus on short term dynamics and contribute to the existing literature in three...

Estimates of potential output and the neutral short-term interest rate play important roles in policy making. However, such estimates are associated with significant uncertainty and subject to significant revisions. This paper extends the structural multivariate filter methodology by adding a...

This paper investigates the evolution of inflation dynamics in the five largest ASEAN countries between 1997 and 2017. To account for changes in the monetary policy frameworks since the Asian Financial Crisis (AFC), the analysis is based on country-specific Phillips curves allowing for...

We study inflation dynamics in Colombia using a bottom-up Phillips curve approach. Thisallows us to capture the different drivers of individual inflation components. We find that thePhillips curve is relatively flat in Colombia but steeper than recent estimates for the U.S.Supply side shocks...

Following a period of disinflation during the 1990s and early 2000s, inflation in emerging markets has remained remarkably low and stable. Was this related to a global disinflation environment triggered by China's integration into world trade and the broader globalization inthese economies, or...

In this paper we analyze the incidence of the VAT and its effects on the income distribution. To identify these effects, we rely on two tax reforms undertaken in Mexico that increased the VAT rate for a group of cities and left the rest unaffected. We compare the inflation rate of the affected...

Nominal wage growth in most advanced economies remains markedly lower than it was before the Great Recession of 2008-09. This paper finds that the bulk of the wage slowdown is accounted for by labor market slack, inflation expectations, and trend productivity growth. In particular, there appears...

Empirical tests of the New Keynesian Phillips Curve have provided results often inconsistent with microeconomic evidence. To overcome the pitfalls of standard estimations on aggregate data, a Full Information Partial Equilibrium approach is developed to exploit sectoral level data. A model...

In late 2015, the Chinese authorities launched a policy to reduce capacity in the coal andsteel industries under the wider effort of Supply-Side Structural Reforms. Around thesame time, producer price inflation in China started to pick up strongly after being trappedin negative territory for...