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Microeconomic Aspects of the Globalization of Inflation

August 19–20, 2011 Zurich, Switzerland

Sponsored by Swiss National Bank and Globalization and Monetary Policy Institute, Federal Reserve Bank of Dallas

The increasing trade integration of the global economy—in particular the rise of low-wage economies—has heightened research and policy interest in the importance of global influences on domestic inflationary processes. It is well known that the relationship between domestic slack and domestic inflation has weakened in recent decades. Some have attributed this weakening to the so-called global slack hypothesis—the idea that not just domestic resource utilization matters for domestic price pressures in an integrated world, but rather resource utilization at the global level. At the same time, the explosion of research using micro price data has advanced our understanding of the price setting process at the national and international level and improved our understanding of exchange-rate pass through.

We seek to combine both elements, the global perspective on inflation and the price setting process on the micro level.

Organizing Committee

Raphael Auer (Swiss National Bank), Peter Egger (ETH Zürich), Andreas Fischer
(Swiss National Bank), and Mark Wynne (Federal Reserve Bank of Dallas).

Program

Papers

Globalization of Inflation: Micro Evidence on the Imported Input Channel
Julien Martin
International Trade Price Stickiness and Exchange Rate Pass-through in Micro Data: A Case Study on US-China Trade
Mina Kim, Jian Wang, and Jason Wu
Micro, Macro, and Strategic Forces in International Trade Invoicing
Linda S. Goldberg and Cédric Tille
Pass Through in General Equilibrium
Saroj Bhattarai
The Geography of Consumer Prices
Attila Ratfai and Adam Reiff
Offshoring Bias in U.S. Manufacturing: Implications for Productivity and Value Added
Susan N. Houseman, Christopher J. Kurz, Paul Lengermann and Benjamin R. Mandel
Effects of Terms of Trade Gains and Tariff Changes on the Measurement of U.S. Productivity Growth
Robert C. Feenstra, Benjamin R. Mandel, Marshall B. Reinsdorf and Matthew J. Slaughter