In the short term, this is unlikely to unravel existing value chains that also benefit from important supplier network effects – that is, from local upstream and downstream inputs and services. But in the long run it might lead to businesses reconsidering their offshoring practices. This brings me to my third point.
Although the importance of the role of money in the transmission mechanism of monetary policy cannot be denied, there exists a wide divergence in views on the impact of changes in monetary aggregates on economic activity and prices among academics and policy makers. This is particularly true when faced of the zero bound on nominal interest rates in combating deflation.