The relationship between inflation and economic slack, shown by the Phillips curve, has long been a cornerstone of economic policymaking. This column uses regional data for 11 euro area countries from 1999 to 2023, instead of country-level data, to estimate the Phillips curve. It finds that inflation still responds to economic slack, but this relationship is more modest and largely shaped by inflation expectations. This implies that traditional demand-side central bank policies may have limited

Tag-uri: Inflatie