Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311169 
Year of Publication: 
2024
Series/Report no.: 
ECB Working Paper No. 3003
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We document that about 33% of the core inflation basket in the euro area is sensitive to monetary policy shocks. We assess potential theoretical mechanisms driving the sensitivity. Our results suggest that items of a discretionary nature, as reflected in a higher share in the consumption baskets of richer households, and those with larger role of credit in financing their purchase, tend to be more sensitive. Non-sensitive items are more frequently subject to administered prices and include non-discretionary items such as rents and medical services. Energy intensity does not seem to drive our results and the sensitive items are not dominated by durable goods, but are relatively evenly split between goods and services. Estimations over different samples show that the impact of monetary policy shocks on sensitive core inflation has become larger recently.
Subjects: 
Monetary policy
inflation
euro area
BVAR
JEL: 
E30
E50
C32
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6893-5
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.