How exactly does the US export inflation?

Discussion in 'Economics' started by Renegen, Jul 24, 2008.

  1. I was thinking about this for a while, and I'd like to know the direct relationship between the US dollar and how inflation would rise in other countries. I don't want stuff like "oil is denominated in US dollars" but actual logical analysis.

    I understand that in a country like Saudi Arabia which has its currency pegged to the US, they are basically at the mercy of US monetary policy and they would have higher inflation, but how does Europe for example suffer higher inflation purely due to the US?