IMPACT OF GLOBALIZATION FACTORS ON INFLATION RISKS DURING COVID-19 PANDEMIC

ABSTRACT

Background: With the changes in the world economy associated with the COVID-19 pandemic, inflationary risks are rising in many countries, while the factors affecting the trend of inflation are becoming more global. At the same time, standard inflation risk prediction models are focused on assessing domestic factors and oil and commodity prices, while globalization factors are considered secondary and neglected. For a more objective assessment of inflationary risks, one must consider the nature and strength with which various globalization factors influence inflation. Objective: The purpose of this article is to determine the presence and nature of the relationship between the globalization factors and the level of inflation. Methods: To confirm the proposed research hypotheses, the authors use the methods of correlation analysis and multiple linear regression. Results: The findings partially confirm the hypotheses put forward about the existence of a relationship between the growth rates of consumer prices and globalization factors. The research hypothesis is confirmed in terms of the existence of a relationship between inflation risks and factors of global trade, financial, interpersonal, informational, and cultural globalization. At the same time, the study shows that the factors of political globalization do not have a significant impact on inflation risks. The inflation rate and globalization factors have a negative correlation, i.e. a high degree of globalization of the country in the world space leads to a decrease in inflation risks. © 2022, Centro Universitario Curitiba - UNICURITIBA. All rights reserved.