(...) the latest issue (No. 117) of the ECB Research Bulletin, (is) entitled “Shocked to the core: a new model to understand euro area inflation”

Marta Bańbura, Elena Bobeica and Catalina Martínez Hernández (all Directorate General Economics, European Central Bank) argue that a sizeable part of the recent surge in inflation has been driven by supply-side factors, with those related to gas prices and global supply chain bottlenecks playing a prominent role. They propose a new model that takes these and other factors into account, particularly as future inflation dynamics could be shaped by the impact of geopolitical tensions on supply chains and the role of gas in the green transition.

 

The ECB Research Bulletin features a selection of recent work on policy-relevant topics by ECB economists. Published on a monthly basis, the articles in the Research Bulletin are intended for a general audience. The views expressed in each article are those of the authors and do not necessarily represent the views of the European Central Bank and the Eurosystem. (...)