Policy Article

An economic recovery with little signs of inflation acceleration: Transitory phenomenon or evidence of a structural change?

In-Depth Analysis prepared for the Monetary Dialogue of the European Parliament

Inflation has been persistently below the inflation target of the ECB despite the ongoing economic recovery in the euro area. In this paper, we analyse whether the relationship between inflation and economic activity in the euro area has changed based on a review of the literature and discuss implications for monetary policy.