Openness and Inflation: Theory and Evidence
Abstract
Because unanticipated monetary expansion leads to real exchange rate depreciation, and because the harms of real depreciation are greater in more open economies, the benefits of unanticipated expansion are decreasing in the degree of openness. Models in which the absence of precommitment in monetary policy leads to excessive inflation therefore predict lower average inflation in more open economies. This paper tests this prediction using cross-country data. The data show a strong and robust negative link between openness and inflation.
Integrity signals
Registry
Cites
Statistics
Claims the paper makes
Claims other papers make about this one
Each is checked against this paper’s own text: does it say what the citing paper says it does?
Romer (1993) argues that as imports increase as a share of total consumption, policy makers have less of an ex post incentive to inflate.
“This follows Romer (1993), who argues that as imports increase as a share of total consumption, policy makers have less of an ex post incentive to inflate.”
From The Limits of Delegation: Veto Players, Central Bank Independence, and the Credibility of Monetary Policy (2003) · cites this paper as Romer (1993)
According to Romer (1993), inflation depends on the openness of an economy.
“According to Romer (1993), inflation depends on the openness of an economy.”
From INFLATION AND CENTRAL BANK INDEPENDENCE: A META-REGRESSION ANALYSIS (2010) · cites this paper as Romer, 1993
Cited by
Sorted by citations
KEEFER, P., & STASAVAGE, D. (2003) · American Political Science Review · doi:10.1017/s0003055403000777 · Cited by 667 · see citing works
INFLATION AND CENTRAL BANK INDEPENDENCE: A META-REGRESSION ANALYSIS
Klomp, J., & De Haan, J. (2010) · Journal of Economic Surveys · doi:10.1111/j.1467-6419.2009.00597.x · Cited by 209 · see citing works
Does central bank independence really matter?
Haan, J. D., & Kooi, W. J. (2000) · Journal of Banking & Finance · doi:10.1016/s0378-4266(99)00084-9 · Cited by 176 · see citing works
- Authors
- Romer, D.
- Venue
- The Quarterly Journal of Economics
- Publisher
- Oxford University Press (OUP)
- Published
- 1993-11-01
- Volume
- 108
- Issue
- 4
- Pages
- 869-903
- ISSN
- 0033-5533 (ISSN-L)
- 1531-4650
- OpenAlex
- W2032175972
- Cited by
- 970
- References
- 0
- Citations by year
- 2026: 28 · 2025: 28 · 2024: 39 · 2023: 33 · 2022: 36 · 2021: 26 · 2020: 42 · 2019: 40 · 2018: 22 · 2017: 26 · 2016: 24 · 2015: 26 · 2014: 35 · 2013: 43 · 2012: 58
- FWCI
- 16.12
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- The Quarterly Journal of Economics (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
- Social Sciences › Economics, Econometrics and Finance › Finance › Global Financial Crisis and Policies
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic theories and models
- Keywords
- economic openness, inflation, real exchange rate depreciation, monetary policy, open economy, cross-national comparison
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
