Globalization affects how inflation and economic activity are related. When countries are more connected, the tradeoff between inflation and activity becomes less steep. This means that when prices go up, economic growth doesn't slow down as much. Globalization also changes how central banks should manage inflation and economic growth. They should be more aggressive about controlling inflation but more relaxed about economic ups and downs. Overall, when countries open up to the world, inflation doesn't change as much in response to supply and demand shocks, but economic activity does.