Globalization and inflation in Europe

Raphael Auer, Kathrin Degen and Andreas Fischer ()

No 65, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

Abstract: What is the impact of import competition from other low-wage countries (LWCs) on inflationary pressure in Western Europe? This paper seeks to understand whether labor-intensive exports from emerging Europe, Asia, and other global regions have a uniform impact on producer prices in Germany, France, Italy, Sweden, and the United Kingdom. In a panel covering 110 (4-digit) NACE industries from 1995 to 2008, IV estimates predict that LWC import competition is associated with strong price effects. More specifically, when Chinese exporters capture 1 percent of European market share, producer prices decrease about 2 percent. In contrast, no effect is present for import competition from low-wage countries in Central and Eastern Europe.

JEL-codes: F11 F12 F14 F16 F40 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2010
New Economics Papers: this item is included in nep-cba, nep-eec, nep-eur and nep-mac
Note: Published as: Auer, Raphael, Kathrin Degen and Andreas M. Fischer (2013), "Low-wage Import Competition, Inflationary Pressure, and Industry Dynamics in Europe," European Economic Review 59: 141-166.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Low-wage import competition, inflationary pressure, and industry dynamics in Europe (2013)
Working Paper: Low-Wage Import Competition, Inflationary Pressure, and Industry Dynamics in Europe (2011)
Working Paper: Globalization and Inflation in Europe (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddgw:65

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