Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/228232
Authors: 
Ball, Laurence M.
Mazumder, Sandeep
Year of Publication: 
2020
Series/Report no.: 
ECB Working Paper No. 2354
Abstract: 
This paper asks whether a textbook Phillips curve can explain the behavior of core inflation in the euro area. A critical feature of the analysis is that we measure core inflation with the weighted median of industry inflation rates, which is less volatile than the common measure of inflation excluding food and energy prices. We find that fluctuations in core inflation since the creation of the euro are well explained by three factors: expected inflation (as measured by surveys of forecasters); the output gap (as measured by the OECD); and the pass-through of movements in headline inflation. Our specification resolves the puzzle of a "missing disinflation" after the Great Recession, and it diminishes the puzzle of a "missing inflation" during the recent economic recovery.
Subjects: 
Phillips curve
euro area
median inflation
missing inflation
missingdisinflation
core inflation
JEL: 
E31
E32
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-3997-3
Document Type: 
Working Paper

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