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Inflation in Emerging and Developing Economies


Emerging market and developing economies, like advanced economies, have experienced a remarkable decline in inflation over the past half-century. Yet, research into this development has focused almost exclusively on advanced economies. Inflation in Emerging and Developing Economies (PDF, 17.6 MB) fills that gap, providing the first comprehensive and systematic analysis of inflation in emerging market and developing economies. It examines how inflation has evolved and become synchronized among economies; what drives inflation globally and domestically; where inflation expectations have become better-anchored; and how exchange rate fluctuations can pass through to inflation. To reach its conclusions, this book employs cutting edge empirical approaches. It also offers a rich dataset of multiple measures of inflation for a virtually global sample of countries over a half-century to spur further research into this important topic.


"Many emerging market economies experienced a remarkable decline in inflation rates over the last two decades, after years of seemingly intractable high inflation. Ha, Kose, and Ohnsorge offer the first book-length analysis of this remarkable achievement, asking how it happened, what it tells us about best policy frameworks, and whether it will endure. At a time when global financial conditions pose a challenge to emerging-market currencies and monetary policies, this book is an essential guide to the road ahead. All students of the global economy will want to read it carefully."
-- Maurice Obstfeld, Economic Counsellor and Director of Research, International Monetary Fund

"A remarkable resource for anyone interested in inflation in the modern world, clear and easy to follow. This book is an order of magnitude more comprehensive than anything else out there, not only in its country coverage, but in its exploration of all the major issues and debates surrounding inflation. Curiously, most of the existing academic literature has focused on advanced economies—which are also thoroughly covered here—yet there is so much to be learned from the dramatic inflation decline in emerging markets and low-income economies, including for design of advanced economy institutions. Any student, academic researcher or policy economist who wants to understand the big picture on world inflation, and when and where it might surprise in the future, will find this book fascinating."
-- Kenneth Rogoff, Thomas D. Cabot Professor of Public Policy and Professor of Economics, Harvard University

"This is an important and timely contribution to our understanding of inflation and the causes of the synchronized decline in the second half of the 1990s around the world. Compared to previous research, it distinguishes specific features of the inflation process in advanced economies, emerging market and developing economies, and low-income countries. It provides many policy insights such as discussions on anchoring inflation expectations and the determinants of exchange rate pass-through, two central issues for price stability. The book reminds us that achieving low inflation does not imply that the risks of high inflation have disappeared and presents policy lessons to achieve and maintain price stability. I am certain that this would be a valuable reference for scholars and policymakers."
-- José De Gregorio, Dean of the School of Business and Economics, Universidad de Chile, and Former Governor of the Central Bank of Chile

"This book tackles important issues that have received far less attention than they deserve—what drives inflation in emerging and developing economies, what effects it has on the populations of these economies, and how the scourge of high inflation can be conquered. The book is rich in data, analysis, and useful policy prescriptions, all of which are woven together in a masterful and thoughtful way that makes the book a very useful reference source for academics and policymakers alike."
-- Eswar Prasad, Tolani Senior Professor of Trade Policy, Cornell University

"This is a truly monumental work, incorporating pathbreaking data collection, a comprehensive survey of the literature, all viewed through the lens of new empirical methods. The volume represents a much-needed compilation of the research on inflation dynamics and broader economic effects, with special reference to emerging market and low-income country experiences that have heretofore been largely neglected. This will be the reference on the phenomenon of inflation for years to come."
-- Menzie Chinn, Professor of Public Affairs and Economics, University of Wisconsin at Madison


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