Globalisation can therefore have mixed effects on inflation. Finally, it has also been argued that both the United States and the euro area witnessed a loosening of the link between inflation and activity because of increased openness. This has important implications for monetary policy.
Diversity within large economic blocs – a common challenge for monetary policy Although we have seen that the environment outside the euro area and the United States has gained importance, the internal economic situation remains a major focus of attention within central banks. Almost nine years after the euro changeover, euro area macroeconomic developments continue to mask some diversity across the euro area countries.