This view ignores the reality that the Bundesbank has moved a long way away from strict monetary targeting in recent years, as is evident from the way they move their policy instrument. There is evidence to suggest that prospective inflationary developments are more likely to trigger a monetary policy move than is a deviation of money supply from its target.
Globalization has obviously brought a large increase in countries’ interdependence and accordingly in the probability of cross-border transmission of real and financial shocks. At the same time the greater risk diversification associated with the increase in the global exposure of financial portfolios should have produced, at least in principle, a smaller exposure to perturbations of a local nature.