Chart 5 Core inflation (year-on-year percentage changes)  Sources: Eurostat and Federal Reserve. Note: Dashed lines denote period averages. Globalisation and policy autonomy If globalisation does not directly lead to low inflation in the euro area, can it constrain the ability of monetary policy to influence the inflation process? This could happen through two channels.
First, globalisation could depress the natural rate of interest and make it harder for monetary policy to stoke price pressures, especially at the lower bound. That could happen if trade and financial integration increase global demand for safe assets. [16] Globalisation might also favour “winner-takes-all” markets that stifle productivity growth and put downward pressure on the natural rate.