importantly, globalisation - led productivity gains contributed to a trend decline of inflation across countries. more and more countries, including emerging market economies ( emes ), strengthened their monetary policy frameworks with a number of them adopting inflation targeting. there was growing talk of globalisation leading to sustained disinflationary forces, technology diffusion and competition. we witnessed low and stable inflation in advanced economies ( aes ) and several emes beginning the 1990s and through the second decade of the new millennium. 5. with greater trade and financial integration, the domestic economies get more exposed to global shocks including volatile short - term capital flows. for instance, global shocks to food, energy and commodity prices affect inflation in every country. during the covid - 19 pandemic and now due to the war in europe, there are clear signs of transmission of global shocks to generalised and synchronised inflation across the world. 6. the recent upsurge in inflation due to the black swan event, i. e., the war in europe, on top of another such event, i. e., the covid - 19 pandemic offers a classic example of the globalised nature of current inflation. around 77 per cent of countries reported acceleration in inflation in 2021 and this proportion is expected to rise further to 90 per cent in 2022, according to the imf ’ s latest projections. moreover, for advanced economies, against an inflation target of 2 per cent, and emerging market economies, against an average target of about 3 - 5 per cent, two - thirds are witnessing inflation above 7 per cent 1. while global factors have always been an important driver of domestic inflation, what we have witnessed over the past three years is the more protracted and sizeable role of global factors in proportions not witnessed in decades. these factors have an even more conspicuous effect on net commodity importing countries like india. 7. with the origins of this inflation being essentially in the supply side, energy and food prices account for more than 50 per cent of the rise in prices. there are also increasing signs of sectoral price spillovers, given that the rise in global energy and commodity prices quickly translate into higher input price pressures. while in some advanced economies, pricing power of firms has increased significantly due to strong domestic demand since 2021, other advanced economies and emerging market economies have just started experiencing such pressures beginning 2022. household inflation expectations have started firming up, though they are based on current inflation data from

narayana kocherlakota : clarifying the objectives of monetary policy speech by mr narayana kocherlakota, president of the federal reserve bank of minneapolis, at the rapid city economic development / black hills knowledge network forum, rapid city, south dakota, 7 october 2014. * * * thanks to david fettig, terry fitzgerald, rob grunewald and sam schulhofer - wohl for their assistance with these remarks. introduction thank you for that generous introduction, and thank you for the invitation to join you here today. this is my second trip to rapid city since becoming president of the federal reserve bank of minneapolis five years ago, and i ’ m glad to be back. i ’ m planning to spend most of my time today talking about the objectives of monetary policy. as you will hear, the fomc has made great progress in formulating, and communicating, the objectives of monetary policy to the public. i will discuss some of that progress and then move on to some ideas about how the committee can make further improvements along these lines. i look forward to your questions, as well – i always learn a lot from q & a sessions. before i start, though, i must remind you that the views i express today are my own and not necessarily those of my federal reserve colleagues. federal reserve system basics let me begin with some basics about the federal reserve system. i like to tell people that the fed is a uniquely american institution. what do i mean by that? well, relative to its counterparts around the world, the u. s. central bank is highly decentralized. the federal reserve bank of minneapolis is one of 12 regional reserve banks that, along with the board of governors in washington, d. c., make up the federal reserve system. our bank represents the ninth of the 12 federal reserve districts and includes montana, the dakotas, minnesota, northwestern wisconsin and the upper peninsula of michigan. eight times per year, the federal open market committee – the fomc – meets to make monetary policy. all 12 presidents of the regional federal reserve banks – including me – and the governors of the federal reserve board contribute to these deliberations. however, the committee itself consists only of the governors, the president of the federal reserve bank of new york and a rotating group of four other presidents. i ’ m one of those four presidents this year. in this way, the structure of the fomc mirrors the federalist structure of our government