THE MONETARY POLICY OF THE EUROPEAN CENTRAL BANK AND INFLATION TRENDS IN THE EURO AREA

Raquel Mercedes García Revilla ()
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Raquel Mercedes García Revilla: National Distance Education University, Faculty of Economics and Business Sciences, Madrid, Spain Author-Name Marinela Bãrbulescu

Scientific Bulletin - Economic Sciences, 2025, vol. 24, issue 1, 43-52

Abstract: This article analyzes the monetary policy of the European Central Bank and inflation trends in the euro area between 2019 and 2024, using official statistical data provided by Eurostat and the standard HICP indicator. The study tracks the dynamics of total inflation, its component structure, and the differences between total and core inflation in the context of major economic shocks, such as the COVID-19 pandemic and the energy crisis of 2022. The analysis highlights the transition from a low inflation regime in the pre-pandemic period to a severe inflationary episode in 2021–2022, followed by a gradual disinflation process in 2023–2024. The results show that, although headline inflation returned to levels close to the ECB’s price stability objective in 2024, its composition indicates persistent domestic pressures, particularly in the services sector. The article highlights the importance of structural analysis of inflation for the calibration of monetary policy and the relevance of using a mix of monetary instruments in a monetary union characterized by economic heterogeneity.

Keywords: monetary policy; European Central Bank; inflation; HICP; euro area; price stability (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 F45 (search for similar items in EconPapers)
Date: 2025
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