Global Inflation refers to the inflationary trends generally noticed in the diverse sectors of the economy of a country. As an important worldwide phenomena, Global Inflation varies largely, owing to the trend components of inflation as well as due the fluctuations arising in the frequencies of the commercial cycles.
Explanation of the concept of Global Inflation:
World Inflation may be defined as the as the function of some of the most essential real developments having shorter purview, as well as monetary developments of longer purview, both on a global basis. This definition is important in the sense that it helps in direct analysis of the concept, which admits that around 70% of the discrepancies involved with Global Inflation are based on both monetary and real developments.
Inflations on the national levels are all attracted by Global Inflation, whereby the national digressions from the common fact revert back. However, the evidence of such activity is similar and booming as far as different sample periods and nations are concerned. Moreover, the impact of Global Inflation has proved to be different in different countries across the world. Thus, a country like Germany which is dedicated towards stabilization of prices is least affected than nations like Italy, having feeble inflation discipline.
Last but not the least, the concept of Global Inflation has also made it possible to re-consider the rising debate on the persistence of inflation.
Contemporary notion about the growing nature of Global Inflation:
The rise in the rate of inflation in recent times has forced a number of countries like China and South Africa to take necessary steps to restrict the growing pace of inflation. To the effect, the Chinese government has raised its rate of interest. The South African Reserve Bank and the overall banking sector across the globe is also working for curbing the growth rate of inflation. This, in fact, has become immensely beneficial activity for the existing conditions of the world economy at present and in days to come.
The US dollar is extending its gains in response to the strong US GDP figures. There are four elements of the report to note. First, the economy expanded by 4.0% in Q2, well above consensus expectations. Second, Q1 was revised to show a 2.1% contraction rather than 2.9%. Third, personal consumption improved to 2.5% from a revised 1.2% pace in Q1 (originally 1.0%). Fourth, and arguably even more significant that the growth itself is the core PCE deflator. It rose to 2.0% from 1.2%.
Eric J. Gleacher Distinguished Service Professor of Finance at the Booth School of Business at the University of Chicago. IMF’s Chief Economist from September 2003 to January 2007. Inaugural recipient of the Fischer Black Prize.
Chancellor of the Exchequer of the United Kingdom from 1992 to 2007. Prime Minister of the UK between 2007 and 2010. Inaugural 'Distinguished Leader in Residence' at New York University. Advisor at World Economic Forum
Vice President and Director of the Global Economy and Development Program at the Brookings Institution. Former Turkish Minister of State for Economic Affairs. Head of the United Nations Development Program (UNDP) from 2005-2009.