4  BIS Review 37/2005  Globalization and the iInflation process Several observers have argued that increased trade has been an important factor in the downtrend in inflation over the past two decades.6 One channel is said to be through greater competitive pressures and another through increased support for price stability engendered by the competitive environment.
The interesting part of the job is that the relative importance of these factors – forecasts, current macroeconomic conditions, financial market conditions and others – is often in flux.