I have an intuitive model door why inflation is global (both now and in the 70s). Inflation benefits governments through seigneurage, and influential borrowers. When one country inflates, other countries feel they can get away with doing more of it themselves, with less risk of capital flight. Dunno, maybe the oil story is simpler?
in the guerrieri et al model there's one central bank per country. in the two unions in one country model each union has the same central bank, right? so there's no global phillips curve
I have an intuitive model door why inflation is global (both now and in the 70s). Inflation benefits governments through seigneurage, and influential borrowers. When one country inflates, other countries feel they can get away with doing more of it themselves, with less risk of capital flight. Dunno, maybe the oil story is simpler?
in the guerrieri et al model there's one central bank per country. in the two unions in one country model each union has the same central bank, right? so there's no global phillips curve