What can keep euro area inflation high?

Ricardo Reis

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: A central bank that faces inflation above target may fail to bring it down. This article discusses six ways in which this happens because the central bank is dominated by: misjudgment, expectations, fiscal policy, financial markets, recession fears, or external forces. It applies this approach to the challenge facing the ECB in 2023-24. The hope is that the factors identified can serve as warning signs for what to avoid.

Keywords: monetary policy; interest rates; central bank independence (search for similar items in EconPapers)
JEL-codes: E31 E50 E58 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2023-11-14
New Economics Papers: this item is included in nep-cba, nep-eec and nep-mon
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Published in Economic Policy, 14, November, 2023, 38(115), pp. 495 – 517. ISSN: 0266-4658

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http://eprints.lse.ac.uk/120728/ Open access version. (application/pdf)

Related works:
Working Paper: What can keep euro area inflation high? (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:120728

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