10 One potential contributor to the flattening of the Phillips curve is a change in the conduct of monetary policy since the 1980s toward greater stabilization of inflation and economic activity; for evidence of such a change, see Clarida, Galí, and Gertler (2000); Boivin and Giannoni (2006); and Boivin, Kiley, and Mishkin (2010).
Nonetheless, for the past six to nine months protectionism has been the main risk at the international level, and one of the major sources of market volatility. It is essential that the United States and China, as well as the EU, find common ground so that these tensions don’t devolve into a trade war that would be harmful to everyone.