7  Volatility is defined as the twenty-quarter rolling standard deviation of the annualized inflation rate. 2  BIS Review 112/2006  the conquest of worldwide inflation? 8 In understanding the key factors behind this change, we can also shed further light on the likelihood of whether this low inflation regime will persist.
In a nutshell, I believe that the factors of globalization, deregulation, and financial innovation, arising partly in response to episodes of high inflation, have effectively eroded the central bank monopoly on the provision of monetary services and have enhanced global competition among currencies.