Globalization Flattens Inflation-Output Tradeoff, Leading to Aggressive Anti-Inflation Policies.
Globalization has changed how inflation and economic activity are related. When countries can easily trade goods, labor, and money, the traditional tradeoff between inflation and economic growth becomes less steep. This means that when inflation goes up, economic activity doesn't necessarily go down as much. As a result, central banks are more likely to focus on keeping inflation low, even if it means tolerating some fluctuations in economic growth.