What can keep euro area inflation high?

Ricardo Reis

No 18375, CEPR Discussion Papers from Centre for Economic Policy Research

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.

JEL-codes: E31 E50 E58 (search for similar items in EconPapers)
Date: 2023-08
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Working Paper: What can keep euro area inflation high? (2023)
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