Global Liquidity, Money Growth and UK Inflation



Ellington, Michael ORCID: 0000-0003-0264-7572 and Milas, Konstantinos ORCID: 0000-0002-9789-384X
(2019) Global Liquidity, Money Growth and UK Inflation. Journal of Financial Stability, 42. pp. 67-74.

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Abstract

This paper uses tools from the classical theory of inflation for UK Consumer Price Inflation from 1970Q1 to 2017Q4. In particular, we adopt augmented Phillips curve type equations within a linear and regime-switching framework where regimes are governed by previous inflation rates. Our non-linear models show that a monetary explanation of inflation is prominent during periods of high inflation. However our models imply that during periods of high inflation, The Bank of England should monitor monetary conditions in conjunction with monetary policy stance; as these can help dampen inflation persistence.

Item Type: Article
Uncontrolled Keywords: Global liquidity, Inflation, Divisia money, Non-linear model
Depositing User: Symplectic Admin
Date Deposited: 10 Sep 2019 07:55
Last Modified: 19 Jan 2023 00:27
DOI: 10.1016/j.jfs.2019.05.012
Related URLs:
URI: https://livrepository.liverpool.ac.uk/id/eprint/3053710

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