Euro Area Inflation and ECB Policy in a Global Environment

Christophe Blot (), Jerome Creel, Paul Hubert, Fabien Labondance and Xavier Ragot
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Christophe Blot: OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po

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Abstract: This paper contributes to the literature investigating the role of global factors in determining Euro area inflation, using a wide list of potential candidates to measure global factors. We show that roughly 50 percent of inflation is explained by global factors; and that the ECB has an impact on the domestic part of inflation. This calls for adjusting the definition of the ECB target to the domestic-driven indicator of inflation which we develop.

Keywords: Inflation; Global factors; Domestic inflation; Principal component analysis; Euro area (search for similar items in EconPapers)
Date: 2016-12
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Published in Politica economica, 2016, 3, pp.539-554. ⟨10.1429/85010⟩

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Journal Article: Euro Area Inflation and ECB Policy in a Global Environment (2016)
Working Paper: Euro Area Inflation and ECB Policy in a Global Environment (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-03399733

DOI: 10.1429/85010

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