Rogoff (2003) provides an alternative theory of how globalization may affect the central bank’s inflation objective. He argues that deregulation and international integration have led to more flexible prices, so that any attempt by a central bank to stimulate the real economy by allowing inflation to rise unexpectedly will be less effective than it would have been in the past. Because central banks have less incentive to create unexpected inflation, their promises to keep inflation low are more credible, which in turn reduces the cost of keeping inflation low. Accordingly, in Rogoff’s analysis, globalization has led monetary authorities to maintain lower long-term inflation rates. A criticism of this story is that it implies that the Phillips curve is steeper today than in the past (that is, that inflation is more sensitive to slack in the economy), a prediction that does not accord with most empirical studies.

It's true that the empirical evidence suggests that the link is looser, that there's less responsiveness of inflation to employment conditions than there perhaps may have been in past decades.

My own view is that we should take a very eclectic approach in thinking about inflation.

From the Q&A session

I have never believed that slack is the main engine of inflation control.  I have talked about this a lot. If you take a standard Phillips Curve model, the inflation rate depends on a gap term, slack if you will, or resource utilization. {It also} depends on inflation expectations and a shock, or random term.  And I have often said that inflation expectations trump the gap.  So I put a high weight on inflation expectations. 

Every now and then there is a supposed 'revolution' that challenges price stability, but our experience is that policy based on ideas such as that money doesn't matter, or the Phillips curve trade-off, end badly. 

As reported by Market News International

The econometric calculations behind the Phillips curve, capacity constraints and output gaps were based on assumptions of a world that, in my opinion, no longer exists.

The relatively low levels of inflation that prevailed over the past decade provide another example of how increasing globalization may be changing the dynamics of the economy. Some have suggested that the Phillips curve has shifted, perhaps owing to the effects of increased globalization.

The natural rate of unemployment is probably better thought of as a zone rather than as a single number, however. In particular, inflation does not appear to rise sharply or discontinuously when the economy reaches a specific rate of unemployment or capacity utilization but instead responds more gradually to variations in the degree of resource utilization (in economics lingo, the Phillips curve is fairly flat).

In my view, the most fundamental policy recommendation put forth by Milton Friedman is the injunction to policymakers to provide a stable monetary background for the economy. I take this to be a stronger statement than the Hippocratic injunction to avoid major disasters; rather, there is a positive argument here that monetary stability actively promotes efficiency and growth. (Hence Friedman's suggestion that the long-run Phillips curve, rather than vertical, might be positively sloped.) Also implicit in Friedman's focus on nominal stability is the view that central banks should avoid excessively ambitious attempts to manage the real economy, which in practice may exacerbate both nominal and real volatility. In Friedman's classic 1960 work, A Program for Monetary Stability, he suggested that monetary stability might be attained by literally keeping money stable: that is, by fixing the rate of growth of a specific monetary aggregate and forswearing the use of monetary policy to "fine-tune" the economy.

I would remind you that in the 20 years prior to this recent episode, the Phillips curve based on NAIRU was probably the single most reliable component of any large-scale forecasting model. It was very useful in understanding the inflation episode over that entire period. Certainly, there is greater uncertainty today about where NAIRU is, but I would be very cautious about prematurely burying the concept.