Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/234735 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
IMFS Working Paper Series No. 159
Publisher: 
Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS), Frankfurt a. M.
Abstract: 
This note argues that the European Central Bank should adjust its strategy in order to consider broader measures of inflation in its policy deliberations and communications. In particular, it points out that a broad measure of domestic goods and services price inflation such as the GDP deflator has increased along with the euro area recovery and the expansion of monetary policy since 2013, while HICP inflation has become more variable and, on average, has declined. Similarly, the cost of owner-occupied housing, which is excluded from the HICP, has risen during this period. Furthermore, it shows that optimal monetary policy at the effective lower bound on nominal interest rates aims to return inflation more slowly to the inflation target from below than in normal times because of uncertainty about the effects and potential side effects of quantitative easing.
Document Type: 
Working Paper

Files in This Item:
File
Size
509.08 kB





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