The International Spillover Among Sectors and the Interconnectedness to the Global Inflation Cycle

Eleftherios Thalassinos, Nejib Hachicha, Amira Hakim
International Journal of Finance, Insurance and Risk Management, Volume 12, Issue 1, 3-11, 2022
DOI: 10.35808/ijfirm/274


Purpose: The main purpose of this article is to shed light on the inflation as catalyst for the production of any other crisis. Design/Methdology/Approach: We are using the Spillover Index to detect the interconnectedness between sectors and inflation in the first step, at the second step we are detecting the cyclicity between the inflation, the commodities, and the financial cycle using the filters. Findings: We provide empirical evidence suggesting that global inflation is subject to cyclicity of oil and in opposition to the cyclicity of gold as hedge fund for money as a substitute in case that the currencies are considered as fiat money. Practical implications: Oil energy cyclicity has an important impact on managing the cyclicity of the global inflation cycle. Gold has an opposite fluctuation to the inflation cycle, suggesting that gold keeps its characteristics as a rely towards any further crisis on an era of cashless transactions. Originality/value: Energy plays a role manager for the fluctuation of the global inflation, which might give a policy for the financialization of the energy system to guarantee more tight relation with the M2 in the system

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