In this era of hyperglobalisation, are central banks still masters of their domestic monetary destinies? Or have they become slaves to global factors? To what extent does a global financial cycle dominate domestic transmission mechanisms and does that, as some might suggest, confer particular responsibilities on those central banks that most influence it? On the surface, there’s evidence of global inflationary cycles that correspond with an intensifying globalisation that propagates common shocks via commodity, trade and financial channels. Correlations of CPI are as elevated today as during the first oil shock and ... (full story)