Economics » Macroeconomic Policy Around the World » Causes of Inflation in Various Countries and Regions

Concepts and Summary

Concepts and Summary

Most high-income economies have learned that their central banks can control inflation in the medium and the long term. In addition, they have learned that inflation has no long-term benefits but potentially substantial long-term costs if it distracts businesses from focusing on real productivity gains. However, smaller economies around the world may face more volatile inflation because their smaller economies can be unsettled by international movements of capital and goods.

Glossary

converging economy

economy of a country that has demonstrated the ability to catch up to the technology leaders by investing in both physical and human capital

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