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What the ECB’s Strategy Review Must Do (Project Syndicate, 4 min read) Former Director of Research at ECB, Lucrezia Reichlin argues that the review must determine whether policy mistakes, poor coordination between fiscal, monetary and financial policies or structural factors are behind the persistent failure to meet the inflation target.
What Drives the FOMC’s Dot Plots? (Journal of International Money and Finance) Labour market data are key drivers of FOMC interest rate projections at all time horizons, while for longer horizons trade and markets news also matter. Inflation is not found to make much difference.
Inflation and Public Debt Reversals in Advanced Economies (IMF, 23 page read) Higher inflation will have a limited impact in reducing DM debt ratios. A 1pp increase in inflation would knock just 0.5-1pp off the debt/GDP ratio, with a higher and more persistent impact under longer debt maturities.