What regional data tell us about the euro area Phillips curve

Anna Beschin, Joan Paredes, Gaetano Polichetti and Théodore Renault

Research Bulletin, 2026, vol. 140

Abstract: Using regional data for 11 euro area countries from 1999 to 2023, instead of country-level data, we find that inflation still responds to economic slack, but this relationship is more modest and largely shaped by inflation expectations. This implies that traditional demand-side central bank policies may have limited direct effects on inflation, highlighting that anchoring expectations is essential for effective monetary policy transmission. JEL Classification: E24, E30, E31

Keywords: Heterogeneity; Non-linearity; Phillips curve; Regional data (search for similar items in EconPapers)
Date: 2026-02
Note: 1389528
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