#demand shock

[mamomvpy]

Tighter monetary conditions – not lower oil prices - are pushing down inflation expectations

Tighter monetary conditions – not lower oil prices – are pushing down inflation expectations

Oil prices are tumbling and so are inflation expectations so it is only natural to conclude that the drop in inflation expectations is caused by a positive supply shock – lower oil prices. However, that is not necessarily the case. In fact I believe it is wrong.

Let me explain. If for example 2-year/2-year euro zone inflation expectationsdrop now because of lower oil prices then it cannot be…

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[romeconomics-blog]

Core Inflation Explained

[wpspoiler name="Quick Definition" ]Core inflation is the long-run, underlying rate of inflation in an economy.[/wpspoiler]

  Also known as

Underlying inflation

What is core inflation?

Inflation, as most of us know, is when an economy experiences an increase in the general level of prices. Core inflation is a term to describe the long-term rate of inflation in an economy.

Not all inflation in an…

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