Abstract
We analyze the behavior of inflation in the era of fast pace information thanks to technological advances, especially internet. Owing to readily available information, prices/inflation should quickly converge under perfect competition. To this end, we explore the possibility of price convergence in regional inflation in the USA including the permanency of such a phenomenon if observed, a concern for monetary policy makers. Empirically, we analyze standard deviation of regional inflation with special attention to technology. We show that standard deviation of inflation is not constant over time, but not necessarily ever-declining. Technology seems to help reduce price dispersion across regions.
| Original language | English |
|---|---|
| Pages (from-to) | 1281-1300 |
| Number of pages | 20 |
| Journal | Technological and Economic Development of Economy |
| Volume | 27 |
| Issue number | 6 |
| DOIs | |
| Publication status | Published - 18 Nov 2021 |
| Externally published | Yes |
Bibliographical note
Publisher Copyright:© 2021 The Author(s). Published by Vilnius Gediminas Technical University.
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
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SDG 17 Partnerships for the Goals
Keywords
- Convergence
- Inflation differentials
- Inflation persistence
- Structural break
- Technology
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