This paper studies the recent trends in inflation in the euro area and estimates to what extent the current … inflationary pressures are driven by demand expansion and by supply side disruptions. First of all, consumer price inflation is … consumer prices, accounting for almost three-quarters of total headline inflation. The fact that price pressure comes mainly …

To understand the possible trajectory of inflation in 2022 and beyond, it is helpful to understand why the United … States and Europe had so much inflation in 2021. …

Euro area inflation has been rising strongly in the wake of the COVID-19 pandemic, giving rise to concerns that there … could be second-round effects, with higher inflation leading to higher inflation expectations, which in turn lead to higher … inflation. This could result in more persistent rises in inflation. …

The key to understanding the series of supply shocks that have hit inflation is the nature of the COVID-19 recession. …

below the ECB’s inflation target. Therefore, a readjustment of the infl ation target seems unjustified. Furthermore, as the … ECB can expect inflation to return to its target, it possibly can accelerate tapering its unconventional monetary policy …