Understanding Worldwide Inflation Rates
Abstract
This study examines the inflation rates of 215 countries in 2013. Researchers took the data from World Bank database, and fractal analysis was used to determine the hidden dimensions why countries have diverse inflation rates beyond the four identified factors. These factors are money supply, commodity prices, employment rate, and production capacity. The characteristic of inflation is the rate at which the general level of prices of goods and services increase. The result showed that there were countries that had extremely high or low inflation rates. Most of these countries that suffered extremely low inflation are in Africa, one in Europe and one in South America. World Bank established an ideal inflation rate of 2%. The majority of the countries in Europe, America and Asia, had stable inflation figures. Fractal analysis showed politics as the hidden dimension of the changes in inflation rates.
Keywords:
Inflation, Politics, Fiscal policy, monetary policy, World Bank
References
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Berge, A., & Borenztein, E. (2000). Full dollarization: Pros and cons. Economic issues No. 24. International Monetary Fund.
Braun.(2004). Inflation, inflation variability and corruption. Economics and Politics, 16, (1), 77-100.
Corsetti, G., Meier, A., & Muller, G.J. (2012). What determines government spending multipliers? IMF Working Paper (WP112/150).
Dacanay, R. & Aliling, L. (2011). Fundamentals of financial management. Quezon City. Rex Book.
Deaton, A. (1995). International commodity prices, macroeconomic performance and politics in Sub-Saharan Africa. Princeton Studies in International Finance. Princeton University.
Dem, A., Mihailovici, G., & Gao, H. (2001). Inflation and hyperinflation in the 20th century: Causes and patterns. Columbia University School of International and Public Affairs. Spoonfork 789.
Hana, (2015). Corruption and inflation. University of Exeter.
Roth, H. (1987). Leading indicators of inflation. (No. 87-01). Retrieved from https://www.kansascityfed.org/PUBLICAT/ECONREV/econrevarchive/1986/4q86roth.pdf
Samuelson, P., & Nordhaus, W. (2001). Economics. New York: McGraw-Hill Company.
Truman, E. (2003). Inflation targeting in the world economy. Institute for International Economics, Washington, D.C.
Vansteenkiste, I. (2009). What triggers prolonged inflation regimes: A historical analysis. (No. 1109) Working Paper for European Central Bank, Frankfurt Germany.
World Bank. (2013) Inflation, GDP deflator. Retrieved from http://data.worldbank.org/indicator/NY.GDP.DEFL.KD.ZG
