Asian Journal of Research in Business Economics and Management

The aim of this paper is to probe the relationship between economic globalization and inflation. Romer (1993) has argued that inflation is smaller in more open economies. Now, in this paper we seek to know is it possible that economic globalization and higher degree of openness detract inflation? A non-stationary panel technique and DOLS estimator were employed to achieve this purpose. We used the economic dimension of KOF index as a proxy of economic globalization. The results of empirical analysis indicate inverse relationship between economic globalization and inflation, so the Romer (1993) hypothesis is supported by findings of present study.