This paper reviews the evidence on the relationship between openness and inflation. There is a robust negative relationship across countries, first documented by Romer (1993), between a country's openness to trade and its long-run inflation rate. However, a key part of the standard explanation...

This paper investigates the relationship between trade openness and inflation for panel data from 1970 to 2007. The results show a negative effect of trade openness on inflation when inflation is higher but no effect when inflation is lower. The negative relationship is stronger along with the...

This paper further tests Romer's (1993) extension of Kydland and Prescott's (1977) predictions for dynamic-inconsistency problems in open economies. In a panel data set of developed and developing countries from 1973 to 1998, I find that openness does not play a role in restricting inflation in...