Potential Decoupling in Monetary Policy?

• Convergence dynamics together with the consumer basket asymmetries;

• • Inflation in EMEs and developing countries may have an upward pressure;
  • EME Central Banks may be more concerned about inflation whereas advanced countries’ Central Banks may be more concerned about growth.
  • In EMEs and developing economies,
  • • Tighter monetary policy?
    • Exchange rate appreciation?
    • Higher inflation targets.