According to Goodhart and Pradhan (2020), the global low inflation environment is the result of a significant increase in the world's labor supply from 1990 to 2018 due to the rise of China and developments in demographics in advanced economies.
However, they point out that this trend is now reversing: a declining and aging population in China and advanced economies will lead to a return of inflation. 3 The distinction between a mild-inflation regime and a high-inflation regime is not clear-cut.