In the thirty years prior to the outbreak of the pandemic, a confluence of four intersecting tailwinds exerted significant influence on aggregate supply, rendering it highly sensitive to variations in aggregate demand. These tailwinds were characterized by a relatively stable geopolitical environment, advances in technology, global interconnectedness, and favorable demographic trends. This period of relative global political stability facilitated the establishment of trade agreements and the expansion of global production networks. At a domestic level, this stability supported market-oriented policies through the privatization of state enterprises, the deregulation of labor, product, and financial markets, and legal reforms that strengthened property rights. The liberalization and globalization of markets fostered more prudent policymaking by making it more challenging to deviate from sound practices, such as inflation targeting. In parallel, technological progress lowered costs and reduced the constraints of time and distance on economic activity, thus stimulating a rise in global productivity.Interwoven with these political and technological developments, globalization amplified the global production frontier. Firms gained access to a larger consumer base, wider resources, and international expertise, while financial globalization eased restrictions. These factors increased productive capacity and drove gains in efficiency and cost reductions at a global scale.Furthermore, demographic trends were favorable, with the working-age share of the global population expanding rapidly from 1970 onwards. In advanced economies, the baby boomer generation entered the job market in large numbers from the 1980s. Trade provided opportunities to incorporate the previously untapped young workforces of emerging markets into the global labor pool.These tailwinds stimulated growth while maintaining low inflation rates through several mechanisms. One key factor was the loosening of the relationship between domestic economic activity and inflation, as access to cheaper production locations drove inflation down. Moreover, contestable domestic markets and intensified international competition weakened the pricing power of firms and bargaining power of workers. Given that countries, particularly advanced economies, could more readily leverage global resources, domestic supply constraints became less restrictive. As a result, Phillips curves flattened, and global rather than domestic slack increasingly became the key driver of inflation. The tailwinds also enhanced the responsiveness of supply to changes in demand, as producers could readily tap into a worldwide network of suppliers and adjust to new demand patterns after disruptions