Why regional tensions will not stoke inflation

The coexistence of the rise in post-Cold War globalisation and the "great moderation" - low inflation and stable growth - is superficially plausible. In practice, though, economists have found only a modest link and point instead at changes in monetary policy, lower inflation expectations and reduced uprating of wages in line with prices. For one, the periods don't quite match. The "hyperglobalisation" period when world trade and global value networks grew most rapidly ran from the late 1990s until shortly before the global financial crisis began in 2008. By that point, the fall in inflation in the rich world had…