Hence, developments in external prices are relevant for the monetary policy of the ECB to the extent that they have an influence on medium term deviations from price stability. What are the potential risks to price stability in the medium term coming from globalisation?
Before addressing these issues and drawing some lessons for monetary policy on the basis of the euro area experience, let me first reiterate that reports of the death of the effectiveness of monetary policy in a more globalised world, have been greatly exaggerated.