Although it remains difficult to reach firm conclusions on the overall effects of globalisation, the most recent developments in manufacturing import prices suggest that globalisation continues to have a dampening effect on inflation of manufactured goods prices. First, extraeuro area manufacturing import price inflation originating from “low-cost” countries remains lower than average import price inflation from other euro area trade partners.
Second, with price levels of imports from low-cost countries remaining substantially lower than those of imports from high-cost countries, the size and persistence of the dampening effect on euro  BIS Review 28/2008  1  area import prices depends predominantly on the “share effect”.