For emerging markets and smaller advanced economies, there is also evidence that while the global financial cycle has indeed been a dominant factor for the last two decades, the arrangement of open macro policies such as the exchange rate regime and financial openness still have direct influence on sensitivity to the financial cycle 2.
In the past two years, crude oil prices have about doubled. During the 1970s, similar run-ups set off sharp increases in global inflation. Today, by contrast, core inflation rates both in the United States and abroad, while they have moved up some, remain essentially contained.