In particular, they continue to import, what is, for them, overly loose monetary policy that will ultimately lead to adjustments in the real exchange rate through higher domestic inflation, with the attendant economic distortions, adjustment costs, and risk of a hard landing. Moreover, at the global level, there are important spillovers of these policies onto other economies, such as Canada's.
Risks regarding the effects of the earthquake disaster The second risk factor regarding the outlook for economic activity and prices concerns the medium- to long-term effects stemming from the recent earthquake disaster. The focal point of the effects of the disaster keeps changing as time passes.