Inflation persistence and price-setting behaviour in the euro area – a summary of the IPN evidence

Filippo Altissimo (), Michael Ehrmann () and Frank Rafael Smets
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Filippo Altissimo: European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany, http://www.ecb.europa.eu/home/html/index.en.html

No 46, Occasional Paper Series from European Central Bank

Abstract: This paper provides a summary of current knowledge on inflation persistence and price stickiness in the euro area, based on research findings that have been produced in the context of the Inflation Persistence Network. The main findings are - i) Under the current monetary policy regime, the estimated degree of inflation persistence in the euro area is moderate; ii) Retail prices in the euro area are more sticky than in the US; iii) There is significant sectoral heterogeneity in the degree of price stickiness; iv) Price decreases are not uncommon. The paper also investigates some of the policy implications of these findings. JEL Classification: E31, E42, E52.

Keywords: Price setting; inflation persistence; monetary policy; EMU. (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-mon
Date: 2006-06
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Persistent link: http://EconPapers.repec.org/RePEc:ecb:ecbops:20060046

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