ECB President Mario Draghi, answering a relevant question in an ECB Governing Council press conference on 6 February 2014, stressed that international monetary cooperation cannot be ruled out. Examples of international monetary policy coordination are not rare, but Olivier Blanchard captured reality with the caveat: “it is like the Loch Ness monster that is much discussed, but rarely seen” (15 December 2013).
This warrants close monitoring, in particular given the risks of second round effects. In case of food related commodities, it also underlines the importance of efficient supply side adjustment in agricultural commodity markets. A separate but nonetheless potentially equally important channel through which globalisation can affect inflation involves the indirect price impact of increased competitive pressures, with two main aspects.