EUROZONE AND THE LOW INFLATION RISK

Abstract

The very low inflation in the Eurozone is, probably, the greatest challenge the European Central Bank has been handling since overcoming the 2008 crisis. This study analyses the monetary policies conducted by the ECB and their struggle to lift the inflation rate just below 2%. The paper presents the main causes for the actual situation, the countries where this problem is more persistent and the measures taken in order to raise inflation. It is of great interest to analyze whether the same policies are proper for different member states facing the deflation issue. For this reason, the study shows to what extent the single monetary policy represents an advantage or, on the contrary, a drawback for the Euro Area member states who try to overcome this critical situation

Eurozone, Macroeconomics, Inflation, Liquidity trap, Secular stagnation