Euro Area Inflation and ECB Policy in a Global Environment

Christophe Blot (), Jerome Creel, Paul Hubert, Fabien Labondance and Xavier Lagot

Politica economica, 2016, issue 3, 539-554

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
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Citations: View citations in EconPapers (6)

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Working Paper: 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:mul:je8794:doi:10.1429/85010:y:2016:i:3:p:539-554

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