Arithmetic is absolute: euro area adjustment

Wolff, Guntram.

The European Central Bank’s monetary policy targets the euro-area average inflation rate. By setting conditions for the area as a whole it should ensure symmetric price adjustment.  Indeed, consumer price inflation rates provide little evidence of asymmetric
adjustment during 2009-11. Only Ireland, which is too small to trigger a symmetric reaction, had significantly lower inflation rates than the average.

Πηγή: Bruegel

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