population ageing and climate change constitute threats to price stability and major new challenges for monetary policy. first, globalisation may turn out to be more inflationary in the future than in its early phase. this was one of the issues addressed in the recent international symposium of the banque de france. for over ten years, with the growing integration of our economies, powerful forces, throughout the world, have been acting to enhance price stability. each year, the integration of millions of people into the world labour market has increased global production capacity, in particular for tradable goods. for monetary policy in developed countries, this process has been equivalent to a sequence of positive supply shocks that took the form of a spontaneous decline in the import price of manufactured goods. all other things being equal, this terms - oftrade gain has allowed for a lower inflation rate for a given capacity utilisation rate. more fundamentally, and although things seem to be less straightforward in this area, it is possible that the increasing openness of our economies have structurally changed the wage and cost formation process in a manner that favours price stability. it is clear that heightened competition triggered by imports reduces the market power of firms at the national level. but, other more indirect effects are also detectable. according to studies carried out at the banque de france, to be published in our next monthly bulletin 2, the disinflationary impact of imports appears to be relatively independent of import volumes : the mere existence of potential competition renders the markets, in the words of experts, more “ contestable ” and influences behavioural patterns. these disinflationary forces are still present. however, there are now other more powerful forces that have the opposite effect. v. chauvin, d. irac, n. maggiar et h. poncet, « l ’ information apportee par les anticipations d ’ inflation sur les salaires et la consommation dans la zone euro » ; j. coffinet et s. frappa, « anticipations d ’ inflation dans la zone euro : que nous disent les marches financiers? » ; j. coffinet et j. s. mesonnier, « anticipations d ’ inflation du secteur prive et conduite de la politique monetaire » s. guilloux et e. kharroubi, « l ’ impact des prix d ’ importations sur l ’ inflation

##ation in the labour and product markets. they are all the more credible than we do not see at this juncture a major diffusion of price increases : less than 30 % of the consumption basket ( energy and food ) are responsible for more than 60 % of the overall increase. there are nevertheless some upside risks to these projections. first, further shocks on food and commodity prices cannot be ruled out. on the demand side, should emerging countries decouple to a large extend from the united states, their contributions would then be sufficient to maintain a significant pace of commodity prices growth. on the supply side, unexpected climate or geopolitical disruptions may lead to shocks on production, as in the past few years. on top of both factors, in the current context of raising inflation and troubled financial markets, commodities attract a growing part of investment, speeding up sometimes rather artificially their price increases. second, the triggering of possible second round effects is a well known source of concern for the governing council of the ecb. the common desire of firms and households to offset profit margin and purchasing power losses stemming from inflationary shocks may lead to a wage - inflation spiral, ending in deteriorated output prospects and welfare losses to all parties. one should however note that nothing significant has materialised at this juncture. on the contrary, remunerations have remained well in line with productivity gains with, to take an example, reference wages increasing by 0. 3 % in france during the fourth quarter of last year. from this point of view, protracted shocks to food and commodity prices put the anchoring of inflation expectations and the credibility of monetary policy to the test. the recent upward trend in european household and market expectations may be of some concern. however, as emphasised in a forthcoming issue of the banque de france monthly bulletin 1, which is entirely devoted to various inflation related issues, currently available measures of inflation expectations appear crude and limited in terms of information content to explain short run wage formation or consumption dynamics. in practice, the eurosystem has a prudent and comprehensive approach when considering private agents ’ inflation expectations. while taking into account a large range of expectations indicators, the governing council does not react to them mechanistically. a firm anchoring of inflation expectations is nevertheless crucial in order to take up the challenges coming from the new inflationary environment. among the long - run evolutions that can be expected with a high degree of certainty, the changing impact of globalisation on inflation,