What can keep euro area inflation high?
Reis, R.
(2023).
What can keep euro area inflation high?
Economic Policy,
38(115), 495 – 517.
https://doi.org/10.1093/epolic/eiad029
(2023).
What can keep euro area inflation high?
Economic Policy,
38(115), 495 – 517.
https://doi.org/10.1093/epolic/eiad029
A central bank that faces inflation above target may fail to bring it down. This article discusses six ways in which this happens because the central bank is dominated by: misjudgment, expectations, fiscal policy, financial markets, recession fears, or external forces. It applies this approach to the challenge facing the ECB in 2023-24. The hope is that the factors identified can serve as warning signs for what to avoid.
