Keeping these broad viewpoints in mind, let me raise several questions that I hope are discussed at the conference. First, what are the implications of East Asia’s growing economic and financial integration on the global business cycle and price movements? The mechanisms through which integration affects various economic variables are complicated.
Among these, the relationship between global economic integration and the inflation process is of particular interest to central bankers. Integration of emerging economies including East Asian economies appears to have exerted downward pressure on wages and prices through intensified competition among firms. Whether this trend will continue into the future will have important bearings on the conduct of monetary policy.