Money is one of the main elements ("pillars") on which the policy strategy of the European Central Bank is based, and such a role requires that money has a stable relationship with the Euro area price level. Typically, the stability of this relation is tested in the context of the so called...

Using a common trends model, we estimate a forward-looking core inflation measure for the Euro area based on long-run relations among major macroeconomic variables, bearing the interpretation of long-run inflation forecast. The proposed measure may be particularly suitable for the two-pillar...

The purpose of this paper is to investigate the micro foundations of how non-experts' (or general public) form inflation expectations. Using a unique dataset we investigate the range of near rational inflation expectations. An important contribution to understanding how non-experts form their...