Third, even the immediate relative price effects of trade with emerging economies are not as benign for inflation in industrial countries as is commonly assumed. The rapid industrialisation of economies like China and India has led to sharply rising energy demand from these countries. This demand has contributed markedly to the increases in oil and commodity prices over the past couple of years.
It is  BIS Review 31/2007  3  difficult to estimate the net effect of these developments on the overall price level in industrial countries. But, in my view, there are no reasons to assume that the overall outcome has been one of a more benign inflation outlook.