The ECB's objective of medium-term inflation below 2 percent has been portrayed by critics as ambiguous, asymmetric … that: (1) in terms of guiding inflation expectations and policymaking, the current definition has functioned much as would … an inflation target centered on 1 1/2-1 3/4 percent; (2) the absence of a specific (point) target for medium …

This paper explores inflation determinants within the EU and implications for new members' euro adoption plans. Factor … analysis partitions observed inflation in EU25 countries into common-origin and country-specific (idiosyncratic) components …. Cross-country differences in common-origin inflation within the EU are found to depend on gaps in the initial price level …

Globalization operates not only by reducing domestic pressures on inflation but also by reducing the scope of domestic … authorities to influence the pace of inflation. First, as markets are integrated, the common, cross-border sources of inflation … increase, reducing the extent of domestically-generated inflation. Based on a methodology identifying common time and sectoral …

The Maastricht inflation criterion, designed in the early 1990s to bring "high-inflation" EU countries in line with … "low-inflation" countries prior to the introduction of the euro, poses challenges for both new EU member countries and the … European Central Bank. While the criterion has positively influenced the public stance toward low inflation, it has biased the …

Exchange rate-based inflation stabilization (ERBS) policies are associated with a boom-recession cycle in economic … forward-looking pricing behavior without inflation stickiness and attribute the slow decline in inflation to the consumption …-looking components of inflation weigh approximately equally in pricing behavior, and therefore, that inflation is partially sticky. The …

In this paper three possible reasons are examined for a sluggish inflation response to a hard currency peg. Models of … credibility and the speed of private sector learning, which are shown to have a major impact on the speed of inflation adjustment …. But even if individual agents believe the government will not devalue, it is shown that inflation inertia can still arise …