How much ECB hiking is needed to get inflation under control?
Release Date:
We discuss whether the ECB tightening path implied by current market prices is sufficient for getting inflation under control in the Euro Area. We highlight the role played by the neutral real rate, the slope of the Phillips curve and inflation expectations for inflation dynamics going forward.
The ECB working paper by Marta Banbura und Elena Bobeica that we mention in the podcast is available here:
https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2471~fc87caada8.en.pdf?9306b59fe8f49ee4e6e926121283ac85
How much ECB hiking is needed to get inflation under control?