However, the shape of the Philips curve can also be affected if, for example, trade union power is reduced or the expected disinflation is not realised because firms decide to increase mark-ups, cancelling out the impact of lower wage growth. The macroeconomic impact of these developments remains uncertain.
What is clear, however, is that monetary policy will have to keep pace with, and be cognisant of, any potential changes in this regard, and adjust accordingly. An area where technological advancement is indeed having a profound impact on central banking is in the financial technology (fintech) space. Fintech architecture, with which some central banks are currently experimenting (e.g.