We develop a theoretical model that features a business cycle-dependent relation between output, price inflation and … inflation expectations, augmenting the model by Svensson (1997) with a nonlinear Phillips curve that reflects the rationale … pronounced convex relationship between inflation and the output gap, meaning that the co-efficient in the Phillips curve on the …

This paper studies factors behind inflation dynamics in the euro area, the UK and the US. It introduces a factor … inflation in the three economies. The FAVAR model framework is also applied to study the effects on inflation subcomponents in … the more recent past. The FAVAR models suggest that headline inflation in the three economies has reacted in a relatively …

In this paper we report results on inflation persistence using 79 inflation series covering the EU countries, the euro … area and the US for five different inflation variables. The picture that emerges is one of moderate inflation persistence … across the board. In particular we find euro area inflation persistence to be broadly in line with US inflation persistence …

breaks in the performance of most simple Phillips curves. Euro area inflation was particularly hard to forecast in the run … practitioners, we find that: (i) the key type of time variation to consider is an inflation trend; (ii) a simple filter-based output …

Can the aging process affect inflation? The prolonged decline of fertility and mortality rates induces a persistent … downward pressure on the natural interest rate. If this development is not internalized by the monetary policy rule, inflation … inflation found in the data for the euro area. In this model, continuing to follow the same rule makes inflation to be on a …

Is inflation persistence in the new EU Member States (NMS) comparable to that in the euro area countries? We argue that … show that due to frequent breaks in inflation time series in the NMS, parametric statistical measures assuming a constant …-varying mean leads to the reversal of this result and suggests similar or lower inflation persistence for the NMS compared to euro …

policy rules and of the optimal unconstrained rule under commitment. The study reaches two main conclusions. First, inflation …

This paper analyses the determinants of inflation differentials and price levels across the euro area countries …. Dynamic panel estimations for the period 1999-2006 show that inflation differentials are primarily determined by cyclical … positions and inflation persistence. The persistence in inflation differentials appears to be partly explained by administered …

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' …

This paper asks whether a textbook Phillips curve can explain the behavior of core inflation in the euro area. A … critical feature of the analysis is that we measure core inflation with the weighted median of industry inflation rates, which … is less volatile than the common measure of inflation excluding food and energy prices. We find that fluctuations in core …