SAJMS - South Asian Journal of Management Sciences

Are the Inflation of World co-integrated?

The hike in prices to any product and/or service is the common man’s fright. Inflation has faced upheavals regardless of the countries around the world. This study has specifically quantified the co- movement of inflation rates of different countries around the globe. Johansen Co-integration was used to analyze the co-movements of the inflation rates of the selected world regions divided as South Asia, North Asia, Africa, Middle East, South America, North America, Central America, Europe and Australia. The results revealed that co-movements of inflation rates prevails in North Asia, Africa, Middle East, North America, Central America, Europe and Australia whereas; South Asia and South America’s co-movements in regards to inflation rates was not found. This simply depicts that the territorial inflation levels in most of the economies shift mutually all around the globe and most of the countries are absorbing the inflationary trends from each other regardless of political, social, technological diversity. But in few nations despite of their symmetric socio-economic nature the inflationary trends are asymmetric.

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