Arbeitspapier

The decline in euro area inflation and the choice of policy strategy

This note argues that the European Central Bank should adjust its strategy in order to consider broader measures of inflation in its policy deliberations and communications. In particular, it points out that a broad measure of domestic goods and services price inflation such as the GDP deflator has increased along with the euro area recovery and the expansion of monetary policy since 2013, while HICP inflation has become more variable and, on average, has declined. Similarly, the cost of owner-occupied housing, which is excluded from the HICP, has risen during this period. Furthermore, it shows that optimal monetary policy at the effective lower bound on nominal interest rates aims to return inflation more slowly to the inflation target from below than in normal times because of uncertainty about the effects and potential side effects of quantitative easing.

Sprache
Englisch

Erschienen in
Series: IMFS Working Paper Series ; No. 159

Klassifikation
Wirtschaft

Ereignis
Geistige Schöpfung
(wer)
Wieland, Volker
Ereignis
Veröffentlichung
(wer)
Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS)
(wo)
Frankfurt a. M.
(wann)
2021

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Wieland, Volker
  • Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS)

Entstanden

  • 2021

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