This article is an abridged version of a paper prepared for an address to the Canterbury Employers’ Chamber of Commerce, on January 27, 2006.1 It examines three major global developments that have occurred in recent years and discusses their impact on the New Zealand economy in terms of their effect on relative prices. These developments include (i) closer integration of China and other emerging economies with large pools of labour, (ii), a housing market boom in some OECD countries, and (iii) recent geopolitical and biosecurity events. The monetary and financial stability policy implications of these developments are discussed as are some lessons for households, businesses and public policymakers.