These developments suggest that the downward pressure on the overall consumer price inflation also reflects, to a considerable extent, the containment of domestic wage increases in industrial countries as a result of the strengthening of global competition.
So far the manufacturing-price and the wage-containing effects on inflation of globalisation seem to have partly counterbalanced inflationary pressures arising from the substantial increases in commodity prices, partly induced by globalisation. A pertinent policy question is: for how long and by how much will global competition continue to contain inflation in industrial countries? The answer to this question is not straightforward.