Are inflation dynamics different in the euro area and the United States

The euro area and the United States have both experienced an episode of strong inflation post COVID-19 pandemic and after the Russian invasion of Ukraine. We highlight commonalities as well as differences in these episodes, in terms of headline and core inflation, inflation differentials and causes, and monetary policy between the euro area and the United States. We propose different scenarios for inflation and monetary policy. This document was provided by the Economic Governance and EMU Scrutiny Unit at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 27 November 2023.