ECB VP Constancio in a delay of the word Sept 22
- the disconnect between inflation and economic slack appears to have made of the interpretation and the control of the dynamics of inflation more difficult
- the exact nature and the mechanisms that are at the base price of the viscosity of continue to be imperfectly understood. The debate between macro-economists on the foundations of the nominal value of the rigidity of prices, and, therefore, how to model them, is ongoing and far from settled. It is important for our understanding of the Phillips curve from a structural point of view, to go beyond a simple correlation between inflation and economic activity. The structural Phillips curve relationship that comes out of the different models of nominal rigidities can be very different.
- these differences have implications for the determination of the degree of price of the viscosity and, therefore, the slope of the Phillips curve.
Full lecture, entitled «Understanding and overcoming low inflation» here
- Euro place may have a limited effect
EUR pairs all the off session highs as NA offices to attend.
EURUSD 1.1973, EURGBP 0.8825 EURJPY 134.07
Constancio concerned about the low inflation and the wage puzzle