Hall, Stephen GeorgeTavlas, George S.Wang, Yongli2023-06-012023-06-012023-03Hall, S.G., Tavlas, G.S. & Wang, Y. 2023, 'Drivers and spillover effects of inflation: The United States, the euro area, and the United Kingdom', Journal of International Money and Finance, vol. 131, art. 102776, pp. 1-31, doi : 10.1016/j.jimonfin.2022.102776.0261-5606 (print)1873-0639 (online)10.1016/j.jimonfin.2022.102776http://hdl.handle.net/2263/90998We investigate the drivers of the recent inflation in three currency areas: the United States, the euro area, and the United Kingdom. To do so, we use a VAR set-up to examine the nature of the shocks that underpinned the recent inflation. We apply-two methods to calculate shocks – the standard Cholesky decomposition and a new method that captures more realistic shocks by solving the VAR backwards. We also use spatial modelling to investigate cross-country inflation spillovers. We find the inflationary shocks in the United States are transmitted to the euro area and the United Kingdom in a powerful and consistent way. The euro area transmits inflation to the other regions but to a lesser extent, while the inflation in the United Kingdom has little effect on the other two regions.en© 2022 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).InflationVAR analysisImpulse responsesSpatial spilloversVector autoregressive (VAR)SDG-08: Decent work and economic growthArticle