The research by David Autor and others has sensitised policymakers to the challenges that global trade and automation may bring in terms of inequality and social cohesion.11  5 / 16  BIS central bankers' speeches  Services, inflation and the transmission of monetary policy A question that has received much less attention in central banking circles, however, is whether and how the rise of the services sector has affected the transmission of monetary policy, and whether it has contributed to the stubbornly weak inflationary pressures that we are observing today.
There are at least two broad and complementary channels through which this may happen. The first channel relates to a composition effect – that is, to the changing weight of services in the consumption basket. As final consumption expenditures shift, so do the weights used to calculate inflation. You can see this on my next slide.