I will first talk about some of the key global supply-side trends that have contributed to low inflation internationally. I will then discuss how the domestic inflation process may be changing and how the Phillips curve may be flattening (more on that later). Finally I will discuss the policy implications of these developments and some of the associated risks.
The European Union and the Euro area on one side of the Atlantic, the United States on the other side not only share the common heritage of their culture and their nature of advanced economies. They are not only of similar size.