Are supply shocks a key driver of global Inflation? Evidence from CPI and GDP deflator analysis
This study investigates the main drivers of inflation measured by CPI inflation and GDP deflator across 20 advanced and emerging economies over the yearly span from 2014 to 2023. Using Principal Component Analysis and Panel Vector Autoregression, the research examines the roles of supply-side shocks...
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| Format: | Article |
| Language: | English |
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Elsevier
2025-06-01
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| Series: | Research in Globalization |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2590051X25000127 |
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| author | Noura Abu Asab |
| author_facet | Noura Abu Asab |
| author_sort | Noura Abu Asab |
| collection | DOAJ |
| description | This study investigates the main drivers of inflation measured by CPI inflation and GDP deflator across 20 advanced and emerging economies over the yearly span from 2014 to 2023. Using Principal Component Analysis and Panel Vector Autoregression, the research examines the roles of supply-side shocks, fiscal and monetary indicators, and trade openness. The findings indicate that supply-side factors, particularly food and oil price shocks as well as supply chain disruptions, are the primary contributors to both CPI and GDP deflator inflation. Fiscal and monetary factors exhibit limited short-term effect, while trade openness gains significance over time, especially for the GDP deflator, reflecting its broader economic impact. Variance decomposition reveals the persistent influence of supply-side factors, while trade openness plays an increasingly significant role in driving inflation in the long run. These findings provide a comprehensive understanding of inflation dynamics, emphasizing the need for tailored policy and cooperated interventions to mitigate external shocks, strengthen fiscal and monetary frameworks, and enhance global trade resilience. |
| format | Article |
| id | doaj-art-5f2c7127dcc94292a6e30503f4402e4c |
| institution | Kabale University |
| issn | 2590-051X |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Research in Globalization |
| spelling | doaj-art-5f2c7127dcc94292a6e30503f4402e4c2025-08-20T03:24:43ZengElsevierResearch in Globalization2590-051X2025-06-011010027910.1016/j.resglo.2025.100279Are supply shocks a key driver of global Inflation? Evidence from CPI and GDP deflator analysisNoura Abu Asab0Department of Business Economics, School of Business, The University of Jordan, Amman, JordanThis study investigates the main drivers of inflation measured by CPI inflation and GDP deflator across 20 advanced and emerging economies over the yearly span from 2014 to 2023. Using Principal Component Analysis and Panel Vector Autoregression, the research examines the roles of supply-side shocks, fiscal and monetary indicators, and trade openness. The findings indicate that supply-side factors, particularly food and oil price shocks as well as supply chain disruptions, are the primary contributors to both CPI and GDP deflator inflation. Fiscal and monetary factors exhibit limited short-term effect, while trade openness gains significance over time, especially for the GDP deflator, reflecting its broader economic impact. Variance decomposition reveals the persistent influence of supply-side factors, while trade openness plays an increasingly significant role in driving inflation in the long run. These findings provide a comprehensive understanding of inflation dynamics, emphasizing the need for tailored policy and cooperated interventions to mitigate external shocks, strengthen fiscal and monetary frameworks, and enhance global trade resilience.http://www.sciencedirect.com/science/article/pii/S2590051X25000127E31E32Q41F41F62 |
| spellingShingle | Noura Abu Asab Are supply shocks a key driver of global Inflation? Evidence from CPI and GDP deflator analysis Research in Globalization E31 E32 Q41 F41 F62 |
| title | Are supply shocks a key driver of global Inflation? Evidence from CPI and GDP deflator analysis |
| title_full | Are supply shocks a key driver of global Inflation? Evidence from CPI and GDP deflator analysis |
| title_fullStr | Are supply shocks a key driver of global Inflation? Evidence from CPI and GDP deflator analysis |
| title_full_unstemmed | Are supply shocks a key driver of global Inflation? Evidence from CPI and GDP deflator analysis |
| title_short | Are supply shocks a key driver of global Inflation? Evidence from CPI and GDP deflator analysis |
| title_sort | are supply shocks a key driver of global inflation evidence from cpi and gdp deflator analysis |
| topic | E31 E32 Q41 F41 F62 |
| url | http://www.sciencedirect.com/science/article/pii/S2590051X25000127 |
| work_keys_str_mv | AT nouraabuasab aresupplyshocksakeydriverofglobalinflationevidencefromcpiandgdpdeflatoranalysis |