This paper discusses comovement between inflation and output in the euro area. The strength of the comovement may not be apparent at first sight, but is clear at business cycle frequencies. Our results suggest that at business cycle frequency, the output and core inflation comovement is high and...

What are the drivers of business cycle fluctuations? And how many are there? Bydocumenting strong and predictable co-movement of real variables during the business cyclein a sample of advanced economies, we argue that most business cycle fluctuations aredriven by one major factor. The positive...