Another important implication of the avian flu pandemic could be for the insurance sector. As emphasized by the Financial Stability Forum, a flood of claims might strain the capacity of the global insurance and reinsurance sectors.
My own assessment is that, quite naturally, the greater integration of the U.S. economy into a rapidly evolving world economy has affected the dynamics of inflation determination. Unfortunately, huge gaps and puzzles remain in our analysis and empirical testing of various hypotheses related to these effects.