The rise in prices observed may also signal a global inflationary pressure if the majority of the world’s economies grow (or have grown in the recent past) at a faster rate than what is consistent with price stability – i.e. become overheated – over a prolonged period, as a result of loose monetary conditions at the global level.
Global inflation can be considered a monetary phenomenon; therefore, in this case there is no need for any adjustment in relative prices. If the global inflationary pressure affects a broad spectrum of globally traded goods (i.e.