And it has led to a significant reduction in poverty levels, too: by some accounts, over half of the reduction in absolute poverty in the world between 1980 and 2000 occurred in China. While the shock itself occurs in China, it is transmitted to the Western world. Direct effects can occur through trade, leading to more international competition.
There have been a number of experts in recent times, particularly from the “other side of the pond”, who thought they were giving central banks good advice by suggesting that they allow higher inflation targets, at least for the time being. IMF Chief Economist Olivier Blanchard spoke of 4% to 5%, and Kenneth Rogoff went as far as to say 6%.