December 4, 2010
START WITH GLOBALIZATION AND TECHNOLOGY...:
Globalisation’s impact on inflation in the European Union (Raphael Auer Andreas Fischer, 5 December 2010, Vox)
It is anyone’s guess where EU inflation is headed once the effects of the financial and sovereign debt crises settle. What is certain, however, is that the inflationary process after the crises will be shaped by the same long-term structural developments that helped create the low-inflation environment in the years leading up to 2007. By far the most salient of these long-term developments is the increasing integration of the world economy, commonly referred to as “globalisation”.
For the EU, globalisation during the last two decades above all has meant increasing integration with the former Warsaw Pact Nations (in particular with the new EU member states) and also with Turkey. Another dimension for the EU is the rise of cheap imports from East Asia, in particular from China.
...and now add demographic decline. Posted by Orrin Judd at December 4, 2010 7:56 PM