This, in turn, provides scope for the economy to operate at a higher level than would otherwise be the case. 1  A. Greenspan. "Monetary Policy under Uncertainty." Remarks made at a symposium sponsored by the Federal Reserve Bank of Kansas City in Jackson Hole, Wyoming, August 2003. Available at: http://www.federalreserve.gov/boarddocs/Speeches/2003/20030829/default.htm.
And the results are not trivial, ranging from just under two percentage points (Japan and Indonesia) to above 3.5 percentage points (Vietnam, Taiwan and HK which is nearly at 4.5 percentage points). So, while the impact on our GDP may not be strong and direct, the “second-round” effect through the “other” trading partners bears watching. What about the effect on domestic inflation?