Despite closing output gaps and tightening labor markets, inflation has remained low in the euro area. Based on an … augmented Phillips Curve framework, we find that this phenomenon-sometimes attributed to low global inflation-has been primarily … caused by a remarkable persistence of inflation, keeping it low despite the reduction in slack. This feature is shown to be …

Do euro area inflation expectations remain well-anchored? This paper finds that the protracted period of low (and below …-target) inflation in the euro area since 2013 has weakened their anchoring. Testing their sensitivity to inflation and macroeconomic … news, this paper expands existing results in two key dimensions. First, by analyzing all available (advanced) inflation …

-recession trend, suggesting hysteresis. Second, while inflation has decreased, it has decreased less than anticipated, suggesting a … breakdown of the relation between inflation and activity. To examine the first, we look at 122 recessions over the past 50 years … unemployment on inflation, for given expected inflation, decreased until the early 1990s, but has remained roughly stable since …

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 …

money in forecasting euro-area inflation. We compare the predictive performance within and among various classes of … contains relevant information for inflation in some model classes. Money-based New Keynesian DSGE models and VARs incorporating …

Upward sloping yield curves are hard to reconcile with the positive association between income and inflation (the … Phillips curve) in consumption-based asset pricing models. Using US and UK data, this paper shows inflation is negatively … the importance of monetary policy, predicting that a permanently low growth and low inflation environment would …

This paper pursues a computationally intensive approach to generate future inflation, followed by an exploration of the … determinants of inflation expectations by estimating a new Keynesian type Phillips curve that takes into account country … indicate that high and climbing inflation could easily seep into people’s anticipation of future inflation and linger. There is …

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 …

The paper evaluates the 24-month ahead inflation forecasting performance of various indicators of underlying inflation … and structural models. The inflation forecast errors resulting from model misspecification are larger than the errors …) overperform other measures over the monetary policy horizon and are leading indicators of headline inflation. Trimmed means …