By contrast, disinflation, which is linked to transitory movements in relative prices, is per se a welcome development because it helps sustain real incomes, provided that medium-term inflation expectations remain well anchored at levels consistent with price stability.
The New Area-Wide Model II is an extended version of the ECB's micro-founded model for forecasting and policy analysis with a financial sector. ECB Working Paper No 2200. Chart 18 The effects of global portfolio rebalancing on trade balance – evidence from DSGE models Euro area effects of a government bond purchase programme with a total purchase volume of approx.