Abstract
Euro area inflation has been rising strongly in the wake of the COVID-19 pandemic, giving rise to concerns that there could be second-round effects, with higher inflation leading to higher inflation expectations, which in turn lead to higher inflation. This could result in more persistent rises in inflation.
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The views in this paper are those of the author and do not necessarily reflect those of the Bank for International Settlements. I am grateful to Emese Kuruc for excellent help with the data.
Richhild Moessner, Bank for International Settlements, Basel, Switzerland; and CESifo, Munich, Germany.
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