Factors behind the taming of worldwide inflation My brief review of worldwide inflation performance suggests that in general, over the past decade, inflation has become substantially lower and less volatile, and expectations of future inflation have also become substantially lower. In understanding the key factors behind this change, we can also shed further light on the question of whether this low-inflation regime will persist.
In a nutshell, I believe that the factors of globalization, deregulation, and financial innovation, arising partly in response to episodes of high inflation, have effectively eroded the central bank monopoly on the provision of monetary services and have enhanced global competition among currencies.