looking pricing account for the observed persistence in aggregate inflation. Second, price-setting responds to movements in … marginal costs, which should therefore be the driving force to observed inflation dynamics. This is not always the case in … conditions under which imposing homogeneity results in overestimating a backward-looking component in (aggregate) inflation, and …

In most OECD countries, we cannot reject up to three breaks in the mean of inflation: one break in the late 1960’s … phenomena. We also show that ignoring breaks in the mean of inflation clearly lead to overrate inflation persistence in standard … bi-variate models of inflation. The response of inflation to shocks in these models is markedly faster with breaks than …

We use inflation and income growth expectations from the ECB Consumer Expectations Survey to measure the subjective … expected pass-through of inflation to income in the main euro area countries. By aggregating consumers' responses to … methodology allows one to examine how the pass-through varies along the probability distribution of expected inflation, which …

fluctuations a re d riven b y o ne major factor. The positive co-movement of real output and inflation convincingly argues for a …