The ECB’s new inflation target from a short- and long-term perspective

Pierpaolo Benigno, Paola Canofari, Giovanni Di Bartolomeo (giovanni.dibartolomeo@uniroma1.it) and Marcello Messori

Working Papers from University of Antwerp, Faculty of Business and Economics

Abstract: The ECB’s target was recently revised, specifying that the 2%-inflation-rate threshold must be applied symmetrically and with a medium-term orientation. In the current phase, characterized by high inflation rates and a growing risk of stagnation in the euro area, this revision of the monetary policy strategy is crucial for explaining the recent decisions of the ECB and forecasting their possible evolution. However, monetary policy can only become one of many policy tools in the euro area. Therefore, there is room for a compelling policy mix necessary to control excessive inflation and support the European economy’s medium-term sustainable growth.

Keywords: European Central Bank; Inflation expectations; Stagflation; Policy mix (search for similar items in EconPapers)
Pages: 26 pages
Date: 2023-03
New Economics Papers: this item is included in nep-cba and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: The ECB’s new inflation target from a short- and long-term perspective (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ant:wpaper:2023006

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