Abstract:
This paper reviews analytical work carried out by central banks that
participated in the Autumn Meeting of Central Bank Economists on "The
evolving inflation process" which the BIS hosted on 28-29 October 2005. The
paper first discusses efforts to document the univariate statistical properties
of inflation and how they have changed over the last decades. It then reviews
studies of disaggregated or micro inflation data and evidence from surveys of
firms concerning their pricing behaviour. Using this micro evidence as
background, the paper also attempts to understand the proximate causes for any
changes in the inflation process, such as disparities in the price behaviour of
tradables and non-tradables or movements in energy prices. The paper then
summarises central bank research on changes in the ultimate determinants of
factors impinging on the inflation process, for example a changing monetary
policy regime, increased globalisation or a legislative reform of the labour
market.
JEL classification: E31, E32, D4, L11, E52, F0
Keywords: inflation, business fluctuations, cycles, market structure and
pricing, monetary policy, economic integration and globalization