This paper tests whether the proposition that globalisation has led to greater sensitivity of domestic inflation to the global output gap (the global output gap hypothesisʺ) holds for the euro area. The empirical analysis uses quarterly data over the period 1979-2003. Measures of the global...

Since the European Central Bank’s (ECB’s) 2003 strategy review, the importance of macro-financial amplification channels for monetary policy has increasingly gained recognition. This paper takes stock of this evolution and discusses the desirability of further incremental enhancements in the...

The recent spike in inflation, unprecedented in the history of the Economic and Monetary Union (EMU), has had major consequences for all areas of the economy, including public finances. This paper aims to provide a detailed assessment of the effects of high inflation on fiscal accounts in the...

This paper tests whether the proposition that globalisation has led to greater sensitivity of domestic inflation to the global output gap (the quot;global output gap hypothesisquot;) holds for the euro area. The empirical analysis uses quarterly data over the period 1979-2003. Measures of the...

Smets and Wouters () find that at short- and medium-term horizons stochastic variations in the goods market mark-up are the most important source of inflation variability in the euro area. This article shows that an empirically plausible alternative interpretation is that the estimated price...

How do the complex institutions involved in wage setting affect wage changes? The International Wage Flexibility Project provides new microeconomic evidence on how wages change for continuing workers. We analyze individuals' earnings in 31 different data sets from sixteen countries, from which...

We document a causal role for price endings in generating micro and macro price rigidity. Based on micro price data underlying the consumer price index in Israel, we document that most stores have a favored price ending—a final digit, usually a zero or nine, used by a majority of prices in...

This paper has three main objectives, namely to (a) propose a new framework that can support placing countries along a core-periphery continuum (beyond the more common binary treatment as either core or periphery), (b) to construct a continuous dynamic theory-based measure (the first, to the...

When referring to the inflation trends over the last decade, economists speak of "puzzles": a “missing disinflation” puzzle in the aftermath of the Great Recession, and a ”missing inflation” one in the years of recovery to nowadays. To this, a specific "excess deflation" puzzle may be...

The studies summarised in this paper focus on the economic implications of euro area firms' participation in global value chains (GVCs). They show how, and to what extent, a large set of economic variables and interlinkages have been affected by international production sharing. The core...