I’m thinking mainly of the US dollar. Is the inflation rate in the US reflected in other countries which use the dollar or which have currencies pegged to the dollar?
Is this different in the EU, where no one country emits the shared currency?
In: 5
The bigger concern is not the far away inflation, it is how that country controlling your currency decides to deal with it.
If the US has high interest rates, then the Federal Reserve will raise interest rates. If you are not experiencing inflation where you are and are more worries about unemployment and/or servicing your dollar-denominated debt, then you may not like the higher interest rates one bit.
This did happen in Europe. The northern countries (Germany, France) have very large economies and monetary policy is often tailored to their needs. If the southern countries, (Greece, Spain) are having Euro-denominated debt issues, they might like lower interest rates and moderate inflation, but the larger economies may want the opposite instead.
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