Second, the way in which globalisation alters the transmission of monetary policy measures – in other words, changes in the short-term interest rate – through the economic system. By and large, the first aspect is closely related to real globalisation, whereas the second question deals with the consequences of financial globalisation.
Globalisation and inflation The ongoing increase in real globalisation is coinciding with a decline in inflation rates worldwide. It is not surprising that these parallel developments have been given a causal interpretation along the lines that increased real globalisation has been driving down inflation rates.