Discussion papers on inflation

Release of Reserve Bank DPs 2016/05 and 2016/06

Two discussion papers by Miles Parker have been published on the Reserve Bank’s website.

DP2016/05: Global inflation: the role of food, housing and energy prices

Abstract:

This paper studies the role of global factors in causing common movements in consumer price inflation, with particular focus on the food, housing and energy sub-indices. It uses a comprehensive dataset of 223 countries and territories collected from national and international sources. Global factors explain a large share of the variance of national inflation rates for advanced countries - and more generally those with greater GDP per capita, financial development and central bank transparency - but not for middle and low income countries. Common factors explain a large share of the variance in food and energy prices.

DP2016/06: The impact of disasters on inflation

Abstract:

This paper studies how disasters affect consumer price inflation, one of the main remaining gaps in our understanding of the impact of disasters. There is a marked heterogeneity in the impact between advanced economies, where the impact is negligible, and developing economies, where the impact can last for several years. There are also differences in the impact by type of disasters, particularly when considering inflation sub-indices. Storms increase food price inflation in the near term, although the effect dissipates within a year. Floods also typically have a short-run impact on inflation. Earthquakes reduce CPI inflation excluding food, housing and energy.

The papers are available for download at

http://www.rbnz.govt.nz/research-and-publications/discussion-papers

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