Third, changes in global capacity utilisation can have important implications not only for the distribution of income across economies but also within them. Over the past year, many firms could expand their profits, often implying that consumers, rather than shareholders, have borne the brunt of the inflationary shock. Finally, the globalisation of inflation does not imply that monetary policy can remain on the sidelines.
The European System of Central Banks is "the new kid on the block" among the large central banks. Since 1999, it has pursued its sole primary objective of price stability. Differences in objectives and in strategy are the main explanations of the perceived differences in response to the current situation. For Europe, monetary integration is an event of historic dimensions.