TY  - JOUR
AU  - Benigno,Pierpaolo
AU  - Faia,Ester
TI  - Globalization, Pass-Through and Inflation Dynamic
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15842
PY  - 2010
Y2  - March 2010
UR  - http://www.nber.org/papers/w15842
L1  - http://www.nber.org/papers/w15842.pdf
N1  - Author contact info:
Pierpaolo Benigno
Dipartimento di Economia e Finanza
Luiss Guido Carli
Viale Romania 32
00197 Rome
ITALY
Tel: 39-0685225-552
E-Mail: pierpaolo.benigno@eief.it

Ester Faia
House of Finance
Gruneburgplatz 1
Frankfurt a M 60322, Germany
E-Mail: faia@wiwi.uni-frankfurt.de
AB  - An important aspect of the globalization process is the increase in interdependence among countries through the deepening of trade linkages. This process should increase competition in each destination market and change the pricing behavior of firms. We present an extension of Dornbusch (1987)'s model to analyze the extent to which globalization, interpreted as an increase in the number of foreign products in each destination market, modifies the slope and the position of the New-Keynesian aggregate-supply equation and, at the same time, affects the degree of exchange-rate pass-through. We provide empirical evidence that supports the results of our model.
ER  -