The paper assesses the performance of medium-term forecasts of euro-area GDP and inflation obtained with a DSGE model … forecasting inflation, while the BVARX model fares better in forecasting …

relationship between inflation and inflation expectations in the euro area. We use theoretical structures based on the New … stability, a few years where inflation was driven mainly by external shocks, and the financial crisis, where the New Keynesian … expectations on inflation and a resurgence of the 'sacrifice ratio' …