Well-anchored inflation expectations are a key factor for achieving economic stability. This paper provides new … empirical results on the anchoring of long-term inflation expectations in the euro area. In line with earlier evidence, we find … that euro area inflation expectations have been anchored until fall 2011. Since then, however, they respond significantly …

This paper proposes a solution to the post-crisis Eurozone "missing inflation" puzzle. I demonstrate that following an … initially subdued inflation, economic agents started to forecast inflation by extrapolating past inflation developments as … opposed to utilizing a purely forward-looking model. I show that such a shift aggravated the decline of actual inflation …

Headline inflation in the euro area jumped to more than three percent in the summer after years of relatively low … inflation rates well below the target of close to but below two percent set by the ECB until July 2021. One of the main reasons … for the rise in inflation is the increase in energy prices since the beginning of 2021. However, there are further …

Whereas strong demand is a key factor driving high inflation in the US, inflation in the Euro Area is mainly due to … prevent second-round effects. Long run inflation expectations - as measured by the survey of professional forecasters - still … seem to be well anchored. The ECB’s announced tightening intends to dampen rising household’s inflation expectations. Given …

We develop a theoretical model that features a business cycle-dependent relation between out- put, 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 coefficient in the Phillips curve on the …

In the past five years, the inflation in the euro area has been well below the European Central Bank’s (ECB) aimed … inflation rate of close to but below two percent for achieving its objective of price stabilization in the medium term. The … present analysis shows that expectations of low inflation, rising cyclical unemployment, and external factors such as low …

In this paper we use a unique dataset to study how awareness of the formulation of the ECB’s inflation aim, defined as … "below, but close to, 2%", shapes the inflation expectations of a representative set of Italian firms. In particular, we show … that in the period under consideration such awareness raises firms’ inflation expectations by about 25 basis points at all …

the determination of inflation and output in the euro area and the existence of a non-vertical long-run Phillips curve …

We study whether the trade-off between inflation and unemployment still exists in the euro area (EA). Using country …. (2022) deploying a non-tradable price index to measure inflation. We find that the slope of the Phillips curve is small and … overstate the steepness of the Phillips curve considerably. Our findings imply that the insensitivity of inflation with respect …

This paper examines euro area inflation dynamics by estimating open economy New Keynesian Phillips curves based on the … survey data and OECD inflation forecasts are used to proxy inflation expectations. The results suggest that, compared with a … closed economy New Keynesian Phillips curve, euro area inflation dynamics are better captured by the open economy …