Type
Article
Titre
Euro Area Inflation and ECB Policy in a Global Environment
Dans
Politica economica
Éditeur
IT : Società Editrice il Mulino
Numéro
3
Pages
539 - 554 p.
ISSN
11209496
Mots clés
Inflation, Global factors, Domestic inflation, Principal component analysis, Euro area
Résumé
EN
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.

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