patterns in economic activity and inflation following oil price shocks in the euro area. In the 'normal regime', oil price … shocks are followed by sizeable and sustained macroeconomic fluctuations, with inflation and economic activity moving in the … same direction as the oil price. The responses of inflation expectations and wage growth point to second-round effects as a …

's inflation objectives lie below the average level of inflation and estimates of the real interest rate likely to prevail over the … economic activity and inflation more volatile and systematically falling short of desirable levels. Moreover, the frequency and … that inflation achieves its 2 percent objective and requires that policymakers aim at inflation near 3 percent when the ELB …