This paper investigates the relationship between trade openness and inflation for panel data from 1970 to 2007. The results show a negative effect of trade openness on inflation when inflation is higher but no effect when inflation is lower. The negative relationship is stronger along with the inflation. The evidences are robust to controlling for exchange rate regime and for indebted countries in the 1980s debt crisis.
International Research Journal of Finance and Economics, 37, 40-45