This article focuses on the question. “Did globalization bring down inflation in the 90’s and 2000’s”. While also posing the question will de-globalization push inflation up when we go into these upcoming decades. We start to understand the affects on supply chains, and prices due to globalization and how with a possibility of increased globalization that there is likely going to be an increase of demand, and not enough goods to supply. The article then focuses on the topic of the price-reduction effect, and how this effect will continue as long as globalization continues to increase. We learn that in 2022 businesses were trying to de-globalize their supply chains and the reason for this was to lessen the rate of an inflation boom and level out globalization.
In Chapter 3 “How to Anticipate Recessions and Downturns” Monetary policy is a main focus point that we learned about with knowing that the FED can slow the economy by tightening their monetary policy, what this does is decrease money supply or raise interest rates. This connects back with the article because businesses tried to figure out how to de-globalize in a way that they can level out the interest rates and keep inflation low without jeopardizing their supply chains. A direct portion that connects from this chapter to the article is that “shortening supply chains is not a pure increase in prices. If the effort succeeds in reducing disruptions, then we’ll have fewer price spikes” this is where monetary policy would come in to have the FED make decisions that will tighten their policy to either decrease money supply or raise the interest rates.