Euro Area Inflation: Why Low For So Long?
By Yasser Abdih, Li Lin, Anne-Charlotte Paret
August 28, 2018
Sculpture of the euro outside the European Central Bank, Frankfurt, Germany: Convergence of core inflation towards the ECB’s medium-term objective is likely to be gradual (photo: Alex Domanski/REUTERS/Newscom)
The euro area economy is in its fifth year of recovery, unemployment is close to its pre-crisis level and the output gaps of most countries have closed. Yet, core inflation continues to be low, notwithstanding temporarily high headline inflation due to higher energy prices. […]