Following the exceptionally strong rise in consumer prices in recent years, the global economy appears to be heading towards a “soft landing”. Inflation is on the decline worldwide. While double-digit inflation rates were not uncommon in 2022, price stability targets have recently come back within reach in many places. Against this backdrop, a number of central banks have already started lowering their key interest rates again. At the same time, economic activity is broadly robust despite monetary policy remaining tight. It has even strengthened somewhat this year. 

Compared with previous episodes of disinflation, this has allowed inflation to be curbed fairly quickly and painlessly. This is partly the result of monetary policy tightening. Estimates and simulations for the euro area suggest that the rise in interest rates has caused inflation to slow down markedly. That said, other factors have also made significant contributions to disinflation. Falling commodity prices and subsiding supply-side disruptions have supported economic activity at the same time. However, severe economic slumps have largely been avoided for other reasons, too. Savings and orders that were accumulated during the coronavirus pandemic, loose fiscal policy, and industrial policy initiatives have boosted demand for goods, services and labour in many places. 

However, some of these economically favourable factors are making it difficult to achieve inflation targets. Labour markets continue to be tight, wage growth remains brisk and inflation is still strong, especially in the services sector. Inflationary risks predominate on the supply side, too. This suggests that monetary policy should be data-dependent, in line with the ECB Governing Council’s communication.

The current global disinflation process follows the sharp rise in inflation rates observed from the beginning of 2021. As the coronavirus pandemic subsided and, later, in the wake of Russia’s war of aggression against Ukraine, inflation picked up sharply in many places. In the group of advanced economies, the annual rate of change in the consumer price index (CPI) had risen to 8.6 % by October 2022. Two years earlier, it had stood at just 0.7 %. In some major economies, inflation rates even peaked in double-digits during the course of 2022. The last time that similarly high rates had been recorded was back in the 1980s (see Chart 2.1). Consumer price inflation increased significantly in emerging market economies, too.

The remarkable rise in inflation rates worldwide was initially driven by the unexpectedly rapid recovery in global demand for goods. 1 In order to halt the downturn in the global economy following the outbreak of the coronavirus pandemic and to avoid a protracted period of economic weakness, policymakers around the world took extensive monetary and fiscal support measures. Many of these support measures were aimed at bolstering aggregate demand. For instance, some countries, including the United States, significantly increased unemployment benefits or offset their citizens’ income losses through one-off payments. Other countries, particularly in Europe, introduced or expanded labour market policies such as short-time work to safeguard jobs and income. 2 At the same time, consumption of contact-intensive services (such as visits to restaurants or hairdressers) was severely restricted due to public health measures taken to contain the spread of the pandemic. Instead, households increasingly purchased goods. As a result of this shift in demand, global industrial production rose considerably and global trade experienced a rapid and strong recovery (see Chart 2.2). 

The shift in demand towards goods exacerbated pandemic-related supply and production bottlenecks and led to price increases at various levels of the value chain. Many enterprises were unable to quickly adjust their production to rapidly rising demand. In addition, interruptions to production caused by the pandemic exacerbated supply bottlenecks. Cross-border supply chains proved to be especially vulnerable. This was due not least to China, whose strict zero-COVID policy led to repeated closures of businesses and ports. 3 Bottlenecks in shipping also contributed significantly to a shortage of key industrial intermediate inputs. At times, some regions of the world lacked containers to transport goods, while, elsewhere, ships were queuing up at ports. One reason for this was the heterogeneous economic developments across regions due to local waves of infection and differing policy responses. All of this was accompanied by supply disruptions, sharply rising commodity prices, higher transport costs and mounting producer prices. Indicators of supply chain disruptions, such as the Global Supply Chain Pressure Index compiled by the Federal Reserve Bank of New York, reached new highs (see Chart 2.3, left-hand side). In this environment of sharply rising production costs and high demand, enterprises in the manufacturing sector, in particular, were also able to significantly increase their mark-ups. 4 Overall, consumer price inflation increased considerably. 

The rise in commodity prices as a result of Russia’s war of aggression against Ukraine intensified the already high global price pressures further. Numerous commodity prices – especially for energy and food – rose again sharply following the outbreak of war (see Chart 2.3, right-hand side). This was attributable primarily to the high degree of uncertainty surrounding future energy supplies from Russia and the limited availability of alternative suppliers, at least in the short term. While Russian gas deliveries to Europe were gradually cut, EU Member States tried to meet their ongoing needs by making purchases from other countries and increasing their gas storage levels. As a result, gas prices rose sharply in 2022, especially in Europe, but also in other regions. 5

Finally, the recovery in demand for services contributed to inflation. Once pandemic-related restrictions were lifted, the previously highly elevated demand for goods gradually abated again. There was now a marked amount of pent-up demand, particularly with respect to service consumption, which had been heavily affected by measures taken to contain the pandemic. Service prices rose significantly, causing the increase in consumer prices to become even more broadly based. 

At the same time, labour market conditions, which had already been tight in many places before the crisis, intensified and wage growth increased. Greater demand for labour was faced with a labour supply that was, to some extent, subdued as a result of the pandemic. 6 The number of job vacancies rose sharply in many places. In the United States during the winter of 2022, for instance, there were two job vacancies for every unemployed person. This strengthened the bargaining power of workers who had suffered sizeable real income losses due to unexpectedly strong inflation. Accordingly, wage growth picked up to a considerable degree.

At the beginning of the recent period of high inflation, central banks faced the challenge of reliably identifying the drivers of inflation in a timely manner. Some economists cited supply shortages caused by the pandemic and, later, Russia’s war of aggression against Ukraine as the main reason for the sharp rise in consumer prices. 7 Others highlighted the role of the extensive monetary and fiscal policy support measures that stimulated demand. 8 In retrospect, an econometric analysis for the United States and the euro area suggests that both supply-side and demand-side factors were important. 9 In the United States, however, demand played a much greater role. 10 In the euro area, by contrast, a larger contribution was attributed to supply-side influences (see Chart 2.4). 11  

Central banks responded to the high rates of inflation with substantial tightening measures, in some cases after initial hesitation. Up until the start of 2022, the central banks in advanced economies, in particular, largely refrained from tightening their monetary policies despite the considerable spike in inflation. One likely factor behind this was the fact that the rise in prices was, in many places, attributed to temporary supply shocks. However, demand also appeared to be broadly robust. Furthermore, the inflationary impact of supply-side shortages proved more persistent than originally thought in many cases. As the risks of deanchoring inflation expectations and of inflation spreading to labour markets increased, central banks in advanced economies responded with substantial interest rate hikes. At this point in time, inflation rates in most advanced economies were already well above their targets. The Federal Reserve System’s Federal Open Market Committee raised monetary policy interest rates in the United States by no less than 5.25 percentage points over one-and-a-half years. In the euro area, the deposit facility rate rose from − 0.5 % in June 2022 to 4 % in September 2023 (see Chart 2.5).

Thus far, economies have proved resilient to the substantial tightening of monetary policy. Concerns about widespread recessions and a sharp rise in the unemployment rate have not materialised. 12 In fact, aggregate output in advanced economies continued to grow overall up to the end of the period under review. Most emerging market economies proved resilient, too.

At the same time, inflation rates have declined significantly since the end of 2022. The decline in inflation seen across countries was similarly synchronous to the previous increase, albeit less steep at the end of the period under review. In the group of advanced economies, the annual rate of the CPI had fallen to 2.8 % by June 2024, according to provisional data. Compared with its peak in 2022, this represented a drop of almost 6 percentage points. The normalisation of energy prices played a key role in this regard. In the case of core components, i.e. excluding energy and food, price pressures proved more persistent. This holds especially true for some services. Although the CPI core inflation rate in advanced economies declined by 2.6 percentage points from its peak, at 3.2 % most recently, it remains markedly above levels that would be compatible with the objective of price stability over the medium term. The disinflation process – i.e. the reduction in inflation – is therefore not yet complete from the perspective of central banks’ mandates.

Many observers now consider a soft landing – a return to price stability without any major disruptions to the real economy – to be likely. Like a number of central banks worldwide, the Eurosystem has now started lowering its monetary policy interest rates again. Nevertheless, monetary policy remains a challenge. The inflation rates targeted by monetary policymakers are still being exceeded in many places, and in some of these there has recently been a lack of progress with regard to achieving these targets. Given how comparatively robust economic developments have been thus far, the question therefore arises as to whether the tightening of monetary policy is continuing to have a dampening effect. 

Inflationary episodes and subsequent periods of disinflation are not uncommon. In the past, too, periods of low and declining inflation were repeatedly interrupted by inflationary surges, which were also often due to the interplay between unexpected developments on the supply side and the demand side. Especially in the 1970s and 1980s, this translated into sharp rises in energy prices. 13 In some cases, households and enterprises adjusted their inflation expectations following these developments. This is one reason why it was not always possible to curb high inflation quickly. Attempts to contain inflation over the long term by means of income policies and price controls were unsuccessful. 14 Successful disinflation periods were generally linked to a tightening of monetary policy. 15

Identifying disinflation episodes using a statistical procedure allows for comparisons between countries and over time. A common dating method is based on a paper by Ball (1994). This identifies phases in which underlying inflation declined significantly. 16 Amongst a large sample of 46 advanced and emerging market economies, there have been almost 230 completed episodes of disinflation since the 1960s according to this method. Among the G20 economies, there were no less than 55 episodes, three of which were in Germany (see Chart 2.6). These include the curbing of inflation following the energy price shocks of the 1970s and early 1980s. Germany also experienced disinflation after the end of the reunification boom. Global median inflation rates fell by 5 percentage points during periods of disinflation. This almost always took several years, however. It is also worth noting that, even in the past, disinflation periods often took place in many regions at the same time. 

Declines in high rates of inflation have generally been accompanied by considerable drops in economic activity. In these cases, real gross domestic product (GDP) fell behind its trend. The ground lost due to such setbacks and bouts of weaker growth was often not regained quickly. 17 A popular measure of the economic cost of disinflation – known as the sacrifice ratio – is the ratio of GDP losses, measured as the sum of the percentage deviations of GDP from its trend, to the decline in underlying consumer price inflation. On average for the disinflation episodes under consideration, the sacrifice ratio has a value of around 1. 18 This means that each reduction of 1 percentage point in the inflation rate was accompanied by an average loss of GDP of 1 %. In advanced economies, the sacrifice ratio has tended to be somewhat higher. 19 Applied to the current situation, the reduction in the (in some cases, double-digit) inflation rates should therefore have been widely accompanied by recessions. 20 However, there have also been examples of relatively painless disinflation processes in the past (see Chart 2.7). 21  

Both the successes in combating inflation and the associated drops in economic activity are likely to have been, not least, the result of monetary policy tightening. Especially in recent decades, central banks have preferred to raise monetary policy interest rates in order to do so. 22 Interest rate hikes affect household and corporate expectations, longer-term interest rates, asset prices and exchange rates via various channels and have a dampening effect on lending and aggregate demand. This dampening of demand, together with expectation effects, curbs wages, producer prices and, ultimately, consumer prices. 23  

Estimates show the effectiveness of monetary policy interest rate steps in the euro area and the United States. 24 Vector autoregressive models 25 can be used to estimate the dynamic relationships between short-term interest rates, price-adjusted and seasonally adjusted GDP as well as its key expenditure components, and consumer price inflation. 26 In this context, the impact of monetary policy is derived based on assumptions about the timing of the transmission process. 27 An unexpected rise of 100 basis points in the short-term interest rate in the past was estimated to dampen the euro area inflation rate at its peak by just over 1 percentage point. Euro area GDP was pushed down by almost 2 % and did not start slowly catching up with the previous trend until two-and-a-half years after tightening had begun. 28 The decline in investment, and especially housing investment, was particularly pronounced. In Germany, too, these are considered to be sensitive to interest rates (see the supplementary information on the impact of monetary policy tightening on housing investment in Germany). In the United States, the inflation-dampening and real economic effects were qualitatively similar, but less pronounced than in the euro area (see Chart 2.8). 29  

If historical experiences were applied to the most recent cycle of monetary policy tightening, substantial macroeconomic losses should have been expected in the euro area in addition to a significant decline in the rate of inflation. This is also the outcome of simulations using a variety of macroeconomic models. These simulations show that, compared with an unchanged monetary policy, the inflation rate would have been markedly and persistently contained. However, real GDP growth in 2023 alone would also have been around 4 percentage points lower than in a scenario without monetary policy tightening (see the supplementary information on the macroeconomic impact of monetary policy tightening in the euro area). The same is likely to apply to other regions of the world, where, in some cases, the monetary policy reins were tightened to an even greater extent. 30  

The current disinflation process initially progressed at a rapid pace in the euro area and other advanced economies. Inflation rates around the world have declined considerably since the peak of the inflation surge in 2022, and price stability appears to be within reach again in many places. Compared with past experiences, initial successes in combating inflation were achieved relatively quickly. This holds particularly true for the euro area. 31 Only in a few past episodes did underlying inflation ease at a similarly rapid pace. However, the most recent episode had also been preceded by an exceptionally rapid rise in inflation. The current disinflation process began earlier in the United States, but so far has progressed somewhat more gradually than in the euro area (see Chart 2.12, left-hand side). 

At the same time, drops in economic activity have so far been moderate. The remarkably rapid tightening of monetary policy after an initial lag would have led one to expect a considerable slowdown in the real economy. Indeed, economic growth in the euro area was very subdued, especially last year. Measured against the previous path of growth, there were distinct real GDP losses. However, these were no larger than in previous periods of disinflation. This is already remarkable given the above average decline in inflation. It becomes even more noteworthy when one takes into account the extraordinary additional burdens arising from the extreme increases in energy prices, the high level of uncertainty caused by the Russian war of aggression against Ukraine, and weak foreign demand. In the United States, where these factors were less significant, macroeconomic activity was only slightly below its trend (see Chart 2.12, right-hand side). 

Overall, the disinflation process has been relatively painless thus far. For almost all major advanced economies, the sacrifice ratios calculated for the current disinflation episode were markedly below their historical median by the end of 2023. Admittedly, this snapshot may paint an overly favourable picture, as further GDP losses could be incurred before price stability returns. 32 This is indicated, for example, by the latest OECD forecasts. 33 Yet, even if the growth outlook, which is moderate in some cases, is factored into the calculation, the sacrifice ratios remain rather low. Even for Germany, which was hit hard by the energy crisis and weak industrial activity, the ratio has remained within historical norms. Much lower values are calculated for the other major euro area members. Disinflation costs in those countries appear to be as mild as in the United States (see Chart 2.13). 

Diminishing supply-side disruptions facilitated rapid disinflation and reduced macroeconomic costs. Not only did various disruptions to macroeconomic production processes contribute to the global surge in inflation in 2021 and 2022, but they also benefited the disinflation process later on as they dwindled away. Lockdowns and pandemic-related supply chain disruptions no longer posed a major obstacle to global production, at the latest when China abandoned its zero-COVID policy at the end of 2022. The shift in demand back to services also mitigated bottlenecks in the supply of intermediate inputs and on transport routes. The intertwining of supply chains was smooth once again, which boosted global production. At the same time, this curbed price pressures at upstream stages. The decline in energy commodity prices from their highs at the outbreak of the Russian war of aggression against Ukraine had a similar effect. Many non-energy commodities also dropped significantly in price. Overall, therefore, producer prices for goods in advanced economies declined for the most part over the course of last year. 

The normalisation of energy and food prices also exerted a direct significant drag on consumer price inflation over the past two years. While the contribution to annual CPI inflation made by these two components together for the aggregate of advanced economies reached a notional peak of 4.2 percentage points in 2022, it was down to only 0.3 percentage point in October 2023. 34 In the euro area, their contribution fell from 7.2 percentage points to 0 percentage point. Since then, the progress of disinflation has been largely dependent on further declines in core inflation.

Economic activity is being supported by a number of factors that are likely to make the return to price stability more difficult rather than easier. In recent years, many economies appeared to react less strongly to interest rate hikes. The macroeconomic importance of interest rate-sensitive investment declined, and financing was increasingly provided in the form of longer-term loan agreements with fixed conditions. An uptick in the natural rate of interest may also have reduced the degree of monetary policy restriction. Moreover, fiscal policy remained rather expansionary, and normalisation following the COVID-19 pandemic also bolstered economic activity. Against this backdrop, a large part of the expenditure components of real GDP and, above all, employment developed much more robustly than in prior periods of disinflation in the United States and also elsewhere (see the supplementary information on the background to the mild disinflation process in the United States). However, this also entails risks to the further disinflation process. 

Pent-up demand from the pandemic is likely to have bolstered economic activity during the period under review. In 2020, pandemic-related production losses and supply disruptions occurred while a variety of government measures stimulated demand. 35 This led to many households accumulating involuntary savings. Meanwhile, the order books of industrial firms filled up (see Chart 2.15). High inflation and the increase in borrowing costs as monetary policy was tightened only partially reduced pent-up demand. The remaining excess demand in advanced economies mitigated the drag from the tightening of monetary policy. 

The unusually robust labour market development could also be partly due to experience gained from the pandemic. Since then, demand for labour in the major advanced economies has risen sharply. This was reflected not only in continued employment growth, but also in the number of vacancies surging on a widespread basis and remaining elevated until the end of the reporting period. Many enterprises had experienced great difficulty in filling vacancies after pandemic-related containment measures were lifted. This experience, combined with the prospect of a labour shortage due to demographic factors, is likely to have prompted firms to hire new employees. In fact, labour supply has been failing to keep pace with labour demand on a widespread basis for several years now (see Chart 2.16). 36 In the United States, in particular, this was due in part to the labour force participation rate remaining slightly subdued. 37 In Europe, by contrast, the tendency to shorten working hours exacerbated labour shortages. 38 Overall, labour markets in advanced economies remain very tight despite a certain degree of easing. 

A relatively loose fiscal policy and industrial policy initiatives mitigated the drag caused by deteriorating financing conditions. According to analyses by the International Monetary Fund, half of all advanced and emerging market economies loosened their fiscal policies in 2023. Even in 2022, this figure was one-third despite inflation rates being even higher. 39 Many of these measures supported the global economy directly through higher government demand. Public funds were also increasingly spent on investment and production incentives for future technologies and key industries. 40 Private investment in these sectors, which had already been rising, was further stimulated by this. 

Longer-term changes in the investment behaviour and financing structures of households and enterprises may have weakened or slowed down the real economic impact of interest rate hikes. For several decades now, the importance of physical investment in buildings and equipment has been on a general decline in many advanced economies. It is increasingly being replaced by investment in information and communication technologies and intellectual property products. 41 Intangible assets of this nature are eligible as collateral for credit operations only to a limited extent and are characterised by rapid amortisation. They should therefore be less sensitive to interest rate changes. 42 The real economy may therefore have been less affected by the sharp monetary policy tightening of recent years than historical relationships would suggest. The tendency to take on longer-term debt at fixed conditions increases transmission lags. Many households, but also enterprises, were thus able to lock in the favourable financing conditions from the low interest rate period following the global financial crisis for years. 43 As a result, the rise in interest rates is only gradually becoming apparent as a cost factor as existing liabilities are rolled over and new borrowing occurs. This is likely to have markedly slowed the drag on both investment and private consumption. 44

Ultimately, the monetary policy stance may have been less restrictive than assumed by many. The impact of monetary policy is determined by more than just the level of market interest rates that it affects. Another important aspect is where these rates stand relative to their equilibrium value, which is associated with price stability and normal aggregate capacity utilisation. 45 There are indications for a number of advanced economies that this natural interest rate may have risen since the pandemic. 46 This also applies to the euro area. 47 Such an increase in equilibrium interest rates could have lessened the tightening impulse from higher policy rates. However, these assessments are subject to a high degree of uncertainty. Additionally, from a longer-term perspective, estimated equilibrium rates remain extraordinarily low.

Since the start of 2024, there have been at most minor successes in the fight against inflation in some places. The analyses presented suggest that the falling inflation rates in the current disinflation process were not just the result of monetary policy. Diminishing supply-side disruptions also played an important role. Other factors slowed and obscured the transmission of the rise in interest rates to the real economy. Owing to this combination of factors, recessions were avoided in most countries. The robust economy is reducing the pressure on firms and workers to show restraint in terms of pricing and wage demands. As a result, consumer price inflation in some cases even intensified again in seasonally adjusted terms at the quarterly and monthly level at the start of 2024 (see Chart 2.17). 

In particular, the inflation of services prices is proving extraordinarily persistent. Consumer price inflation for services in June 2024 remained at just over 4 % in the euro area and even exceeded 5 % in the United States. In other countries, too, disinflation in the services sector is slower than has been typical in the past. 48 A key factor in this is likely to be the persistently strong wage growth, which is particularly significant in the labour-intensive services sector (see Chart 2.18). In addition, productivity growth is exceptionally subdued, especially in the euro area. The high wage growth is therefore being transmitted almost entirely to unit labour costs. In view of the labour markets remaining very tight and the real wage losses that have been incurred, wage dynamics are expected to ease off only slowly. This is likely to make it more difficult to achieve a swift return to price stability. 

A stronger economic recovery could delay a further decline in inflation rates. According to surveys of purchasing managers, business conditions have improved markedly worldwide since the start of 2024. In advanced economies, this was concentrated in the services sector and seems to be driven largely by growing demand. Accordingly, producer price inflation remained high in the services sector. 49

Relief provided by the supply side appears to have largely petered out. Indicators of supply chain disruptions, such as the Global Supply Chain Pressure Index compiled by the Federal Reserve Bank of New York, reached their lows in mid-2023. The same happened to many commodity prices. Since then, they have tended to start edging upwards again. They are therefore unlikely to make any significant contribution to further disinflation. Instead, geopolitical conflicts pose significant supply-side upside risks to consumer prices. This applies first and foremost to the tense situation in the Middle East.

Potential further interest rate cuts should therefore be carefully considered in light of incoming data. At its June 2024 monetary policy meeting, the ECB Governing Council decided to lower the three Eurosystem key interest rates by 25 basis points each given the successes made in the fight against inflation. The central banks of other major advanced and emerging market economies had already begun cutting interest rates at that time. In the United States, too, members of the Federal Open Market Committee are signalling an interest rate reversal. However, the still too strong inflation, uncertainty about the actual degree of monetary policy restriction and various upside risks call for a data-dependent approach. This is in line with the ECB Governing Council’s communication following its monetary policy meeting in early June. 50  

Abraham K. and L. Rendell (2023), Where are the missing workers?, Brooking Papers on Economic Activity, BPEA Conference Drafts, Spring 2023.

Acre, A., A. Consolo, A. D. da Silva and M. Mohr (2023), More jobs but fewer working hours, The ECB Blog, entry dated 7 June 2023.

Amatyakul, P. D. Igan and M. Lombardi (2024), Sectoral price dynamics in the last mile of post-Covid-19 disinflation, BIS Quarterly Review, March 2024, pp. 45‑57.

Ampudia, M., F. De Fiore, E. Kharroubi and C. Manea (2023), Private debt, monetary policy tightening and aggregate demand, BIS Bulletin No 70, 24 February 2023.

Ari, A., C. Mulas-Granados, V. Mylonas, L. Ratnovski and W. Zhao (2023), One Hundred Inflation Shocks: Seven Stylized Facts, International Monetary Fund Working Paper WP/23/190. 

Ball, L., What determines the sacrifice ratio?, in N. G. Mankiw (ed., 1994), Monetary policy, The University of Chicago Press, pp. 155‑193.

Benigno, G., B. Hofmann, G. N. Barrau and D. Sandri (2024), Quo vadis, r*? The natural rate of interest after the pandemic, BIS Quarterly Review, March 2024, pp. 17‑30.

Bernanke, B. and O. Blanchard, Analysing the Inflation Burst in Eleven Economies, in B. English, K. Forbes and A. Ubide (eds., 2024), Monetary Policy Responses to the Post-Pandemic Inflation, CEPR Press, pp. 291‑304.

Bindseil, U. (2004), The operational target of monetary policy and the rise and fall of reserve position doctrine, ECB Working Paper No 372, June 2004.

Brand, K., N. Lisack and F. Mazelis (2024), Estimates of the natural interest rate for the euro area: an update, ECB Economic Bulletin, Issue 1/2024, pp. 72‑76.

Bry, G. and C. Boschan (1971), Cyclical Analysis of Time Series: Selected Procedures and Computer Programs, National Bureau of Economic Research, New York.

Caggese, A. and A. Pérez-Orive (2022), How stimulative are low real interest rates for intangible capital?, European Economic Review, Vol. 142, pp. 1‑31.

Cecchetti, S. G., M. E. Feroli, P. Hooper, F. S. Mishkin and K. L. Schoenholtz (2023), Managing disinflations, CEPR Discussion Paper DP18068, CEPR Press.

Christiano, L., M. Eichenbaum and C. Evans (2005), Nominal rigidities and the dynamic effects of a shock to monetary policy, Journal of Political Economy, Vol. 113 (1), pp. 1‑45.

Coenen, G., J. Hutchinson, C. Montes-Galdón, R. Motto and A. Saint Guilhem (eds.) (2022), Rate forward guidance in an environment of large central bank balance sheets: a Eurosystem stock-taking assessment, ECB Occasional Paper Series No 290.

David, J. and F. Gourio (2023), The Rise of Intangible Investment and the Transmission of Monetary Policy, Chicago Fed Letter Number 482, August 2023.

Davis, M. and J. Heathcote (2007), The price and quantity of residential land in the United States, Journal of Monetary Economics, Vol. 54 (8), pp. 2595‑2620.

De Soyres, F., D. Moore and J. Ortiz (2023), An update on Excess Savings in Selected Advanced Economies, FEDS Notes, 15 December 2023.

Del Negro, M., M. P. Giannoni and C. Patterson (2023), The forward guidance puzzle, Journal of Political Economy Macroeconomics, Vol. 1 (1), pp. 43‑79.

Deutsche Bundesbank (2024a), The impact of Chinese supply chain shocks on manufacturing in Germany, Monthly Report, January 2024, pp. 17 f.

Deutsche Bundesbank (2024b), Recent inflation developments in the light of a stylised macro model, Monthly Report, February 2024, pp. 51 f.

Deutsche Bundesbank (2024c), Drivers of the recent recovery of sentiment in the advanced economies, Monthly Report, May 2024.

Deutsche Bundesbank (2023a), Factors driving European gas prices, Monthly Report, November 2023, pp. 20‑21.

Deutsche Bundesbank (2023b), Heterogeneous impact of monetary policy in the euro area?, Monthly Report, September 2023, pp. 37‑60.

Deutsche Bundesbank (2023c), Model-based recommendations for monetary policy decision-making, Monthly Report, December 2023, pp. 37‑54.

Deutsche Bundesbank (2023d), The construction boom in the US semiconductor industry, Monthly Report, August 2023, pp. 15 f.

Deutsche Bundesbank (2023e), The impact of digitalisation on labour productivity growth, Monthly Report, March 2023, pp. 43‑65.

Deutsche Bundesbank (2022a), High inflation rates in the euro area and the United States: similarities and differences, Monthly Report, August 2022, pp. 14‑15.

Deutsche Bundesbank (2022b), The recent energy price shock in a historical comparison, Monthly Report, November 2022, pp. 15 f.

Deutsche Bundesbank (2021a), The global economy during the coronavirus pandemic, Monthly Report, October 2021, pp. 43‑64.

Deutsche Bundesbank (2021b), The role of the disruption of Chinese supply chains in production slumps in the United States and the EU in spring 2020, Monthly Report, October 2021, pp. 52 ff.

Deutsche Bundesbank (2021c), Housing prices in Germany in 2020, Monthly Report, February 2021, pp. 60‑62.

Deutsche Bundesbank (2020a), Two models for estimating residential property prices in Germany, Monthly Report, October 2020, pp. 73‑74.

Deutsche Bundesbank (2020b), The protracted rise in residential property prices in Germany from a macroeconomic perspective: transmission channels and fundamental determinants, Monthly Report, October 2020, pp. 67‑85. 

Deutsche Bundesbank (2017), The natural rate of interest, Monthly Report, October 2017, pp. 27‑42.

Deutsche Bundesbank (2013), Is private consumption in the United States following its typical cyclical pattern?, Monthly Report, April 2013, pp. 23 ff.

Döttling, R. and L. Ratnovski (2023), Monetary policy and intangible investment, Journal of Monetary Economics, Vol. 134, pp. 53‑72.

Doornik, B., D. Igan and E. Kharroubi (2023), Labour markets: what explains the resilience?, BIS Quarterly Review, December 2023, pp. 77‑93.

Eickmeier and Hofmann (2022), What drives inflation? Disentangling demand and supply factors, Deutsche Bundesbank Discussion Paper No 46/2022.

Erceg, C. and A. Levin (2006), Optimal monetary policy with durable consumption goods, Journal of Monetary Economics, Vol. 53, pp. 1341‑1359.

European Central Bank (2024), Monetary policy decisions, press release, 6 June 2024.

European Central Bank (2023a), The EU’s Open Strategic Autonomy from a central banking perspective: Challenges to the monetary policy landscape from a changing geopolitical environment, Occasional Paper No 311.

European Central Bank (2023b), A model-based assessment of the macroeconomic impact of the ECB’s monetary policy tightening since December 2021, Economic Bulletin, Issue 3/2023, pp. 70‑77.

European Commission (2023), Profit margins and their role in euro area inflation, European Economic Forecast, Spring 2023, pp. 29‑31.

Federal Open Market Committee (2024), FOMC Projections materials, 12 June 2024.

Federal Open Market Committee (2023), FOMC Projections materials, 13 December 2023.

Franco-German Council of Economic Experts (2023), The Inflation Reduction Act: How should the EU react?, Joint statement, September 2023. 

Furman, J. (2022), This Inflation Is Demand-Driven and Persistent, Project Syndicate, 22 April.

Geiger, F. and F. Schupp (2018), With a little help from my friends: Survey-based derivation of euro area short rate expectations at the effective lower bound, Deutsche Bundesbank Discussion Paper No 27/2018.

Gerke, R., D. Kienzler and A. Scheer (2022), On the macroeconomic effects of reinvestments in asset purchase programmes, Deutsche Bundesbank Discussion Paper No 47/2022.

Giannone, D. and G. E. Primiceri (2024), The drivers of post-pandemic inflation, ECB Forum on Central Banking, 1‑3 July 2024.

Gomes, S., P. Jacquinot and M. Pisani (2012), The EAGLE. A Model for Policy Analysis of Macroeconomic Interdependence in the Euro Area, Economic Modelling, Vol. 29 (5), pp. 1686‑1714.

Haertel, T., B. Hamburg and V. Kusin (2022), The macroeconometric model of the Bundesbank revisited, Deutsche Bundesbank Technical Paper No 01/2022.

Hantzsche, A., M. Lopresto and G. Young (2018), Using NiGEM in Uncertain Times: Introduction and Overview of NiGEM, National Institute Economic Review, Vol. 244 (1), pp. R1-R14.

International Monetary Fund (2024a), Fiscal Monitor: Fiscal Policy in the Great Election Year, April 2024.

International Monetary Fund (2024b), Feeling the Pinch? Tracing the Effects of Monetary Policy Through Housing Markets, World Economic Outlook, April 2024, pp. 43‑63.

International Monetary Fund (2023), Managing Expectations: Inflation and monetary policy, World Economic Outlook, October 2023, pp. 49‑69.

International Monetary Fund (2022), World Economic Outlook: Countering the Cost-of-Living Crisis, November 2022.

International Monetary Fund (2021), Fiscal Monitor Database of Country Fiscal Measures in Response to the COVID-19 Pandemic, October 2021. 

Kajuth, F. (2021), Land leverage and the housing market: Evidence from Germany, Journal of Housing Economics, Vol. 51 (C), 101746.

Katayama, H., N. Ponomareva and M. Sharma (2019), What determines the sacrifice ratio? A Bayesian Model Averaging approach, Oxford Bulletin of Economics and Statistics, Vol. 81 (5), pp. 960‑988.

Kühl, M. (2018), The Effects of Government Bond Purchases on Leverage Constraints of Banks and Non-Financial Firms, International Journal of Central Banking, Vol. 14 (4), pp. 93‑161.

Lane, P. R. (2023), The euro area hiking cycle: an interim assessment, Dow Lecture at the National Institute of Economic and Social Research, London, 16 February 2023.

Magkonis, G. and K.-M. Zekente (2020), Inflation-output trade-off: Old measures, new determinants?, Journal of Macroeconomics, Vol. 65, pp. 1‑16.

Mandler, M., M. Scharnagl and U. Volz (2022), Heterogeneity in euro area monetary policy transmission: evidence from a large multicounty BVAR model, Journal of Money, Credit and Banking, Vol. 54 (2‑3), pp. 627‑649.

Mazumder, S. (2014), Determinants of the sacrifice ratio: Evidence from OECD and non-OECD countries, Economic Modelling, Vol. 40, pp. 117‑135.

Mishkin, F. (2007), Housing and the monetary transmission mechanism, NBER Working Paper 13518.

Neely, C. J. (2022), Why Price Controls Should Stay in the History Books, Regional Economist, Federal Reserve Bank of St. Louis, 24 March 2022.

Nelson, E. (2022), How Did It Happen?: The Great Inflation of the 1970s and Lessons for Today, Finance and Economics Discussion Series 2022‑037, Board of Governors of the Federal Reserve System.

OECD (2024), General assessment of the macroeconomic situation, OECD Economic Outlook May 2024, pp. 9‑52.

OECD (2023), The contribution of unit profits to domestic inflationary pressures, OECD Economic Outlook June 2023, pp. 26‑30.

Peersman, G. and F. Smets, The monetary transmission mechanism in the Euro area: more evidence from VAR analysis, in I. Angeloni, A. Kashyap and B. Mojon (eds., 2003), Monetary policy transmission in the Euro area, Cambridge University Press, pp. 36‑55.

Ramey, V. A., Macroeconomic Shocks and Their Propagation, in J. B. Taylor and H. Uhlig (eds., 2016), Handbook of Macroeconomics, Vol. 2, Elsevier, North Holland, pp. 71‑162.

Stiglitz, J. E. and I. Regmi (2023), The causes of and responses to today’s inflation, Industrial and Corporate Change, Vol. 32, pp. 336‑385.

Summers, L. H. (2021), The Biden stimulus is admirably ambitious. But it brings some big risks too, Washington Post, 4 February. 

Tetlow, R. J. (2022), How large is the output cost of disinflation?, Finance and Economics Discussion Series 2022‑79, Board of Governors of the Federal Reserve System, Washington.