-  A widespread hypothesis holds that lower headline inflation is due to lower imported prices or larger imports of cheaper goods, as a result of lower production costs arising from higher competition in the face of production factor globalization. However, this essentially microeconomic explanation of such an essentially macroeconomic phenomenon is suspicious.
Let me borrow a term coined by Cecchetti, who calls this the “accounting” theory of inflation. The problem arise because prices affected by trade are “relative” prices. The import of a foreign product that is cheaper than the domestic one produces a change between this price and the other prices in the economy, while inflation is actually the aggregate change in general nominal prices.