In this paper we use a unique dataset to study how awareness of the formulation of the ECB’s inflation aim, defined as "below, but close to, 2%", shapes the inflation expectations of a representative set of Italian firms. In particular, we show that in the period under consideration such...

This paper – which takes into consideration overall experience with the Harmonised Index of Consumer Prices (HICP) as well as the improvements made to this measure of inflation since 2003 – finds that the HICP continues to fulfil the prerequisites for the index underlying the ECB’s...