real-world economics review, issue no. 99 subscribe for free
The G ea Di i fla i : The I Fac I O e a ed. A N e
a ce f he Chi a
Leon Podkaminer [The National Bank of Poland] Copyright: Leon Podkaminer, 2022
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Abstract C a c belief Chi a i eg a i i he gl bal a fac i g e does not seem to have depressed the wage shares in the advanced countries. If anything, it also failed to raise unemployment rates in the advanced countries. The G ea Di i fla i he ad a ced b G dha a d P adha i c i ci g a d is their conclusion that the approaching great demographic reversal augurs an inflation revival.1 Keywords: globalisation, wage shares, inflation, demographic reversal JEL Codes: E24, E31, F15, F62
The recent work by Goodhart and Pradhan (2020) suggested that the long era of low inflation igh be c i g a e d: gl bali a i a d de g a hic h ck ha e led a e a di a il defla i a e d e he la 30 ea ( . 9). The i eg a i f Chi a i the global manufacturing complex by itself more than doubled the available labour supply for he d ci f adeable d c a g he ad a ced ec ie ( . 2). The ec ic effec f hi ha e bee a d a a ic eake i g i he ba gai i g e f he lab f ce de ha he defla i a f ce ha e bee g ( . 5). B The G ea Re e al I N Sa i g ( . 9): a ha decli e i he be f h e e e i g he lab f ce l i c ea ed de a d f lab eeded f l ki g af e he elde l , h e numbers will increase very strongly and rapidly (p. 11). Thi N e a g e ha he effec f Chi a i eg a i i he ld ec a ha e had much of a disinflationary effect on the advanced economies until relatively late. Moreover, it suggests that the repression of wages in the advanced economies took place before the fullscale integration of China into the global trading system. Demography need not have been responsible for the repression of global inflation. Therefore, the approaching demographic reversal does not necessarily augur a revival of high inflation.
1 The views expressed in this text are those of the author and do not necessarily represent the views of
he a h
employer.
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