Ihrig and others (2007) document a rise in the sensitivity of U.S. inflation to import prices over time, although they do not identify such a trend in other countries. BIS Review 108/2007  5  terms). The resulting decrease in net exports implies a reduction in aggregate demand.
In addition, an appreciation of the dollar that leads to a decline in import prices also helps restrain overall U.S. inflation. By expanding the share of tradable goods and services in the economy, globalization might increase the role of the exchange rate as a transmission channel of monetary policy and could reduce the role of the interest rate channel.