The main drivers of consumer price inflation in small open economies like Sweden and Canada are global demand shocks, which are temporary changes in global demand that affect foreign output and inflation. Negative global demand shocks not only cause deflation but also lead to a depreciation of the exchange rate. This means that the exchange rate response to these shocks is opposite to what is typically expected. Additionally, fluctuations in exchange rates in these economies are less influenced by exogenous shocks to the exchange rate compared to other macroeconomic models.