Inflation persistence and price-setting behaviour in the euro area: a summary of the IPN evidence

Michael Ehrmann, Frank Smets and Filippo Altissimo

No 46, Occasional Paper Series from European Central Bank

Abstract: This paper provides a summary of current knowledge on inflation persistence and price stickiness in the euro area, based on research findings that have been produced in the context of the Inflation Persistence Network. The main findings are: i) Under the current monetary policy regime, the estimated degree of inflation persistence in the euro area is moderate; ii) Retail prices in the euro area are more sticky than in the US; iii) There is significant sectoral heterogeneity in the degree of price stickiness; iv) Price decreases are not uncommon. The paper also investigates some of the policy implications of these findings. JEL Classification: E31, E42, E52

Keywords: EMU; inflation persistence; monetary policy; price setting (search for similar items in EconPapers)
Date: 2006-06
Note: 203739
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (182)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbops:200646

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