Fall and Convergence of World Inflation Rates (1998-2019)

Abstract

The trend observed from 1998 until 2019 over world disinflation and over the stabilization of national inflations at low levels is due to the behavior of US inflation. This can be said in the light of econometric results with quarterly US figures and other 30 countries of different continents. Indeed, these re sults favor such a hypothesis and do not favor alternative hypotheses that would emphasize the national monetary policies or deflationist shocks of “real” origin (non-monetary). Besides, the empirical evidence indicates that, in general terms, national monetary policies have been lax in this sense: monetary policy makers have taken advantage of the disinflationary trend from the US to execute lax policies by foreseeing related benefits (over the economic activity, for instance).