Globalization has not materially affected the ability of the Federal Reserve to influence financial conditions in the United States, nor has it led to significant changes in the process which determines  10  Work finding no role or, at best, a marginal one for a global output gap includes Tootell (1998), Hooper, Slok, and Dobridge (2006), Pain, Koske, and Sallie (2006), and Ball (2006).
In contrast, Gamber and Hung (2001) find that, over 1976-99, a trade-weighted average of capacity utilization for thirty-five U.S. trading partners is a significant determinant of U.S. inflation. 6  BIS Review 21/2007  the U.S. inflation rate. However, effective monetary policy making now requires taking into account a diverse set of global influences, many of which are not yet fully understood.