The study examined the effects of various demand factors, including fiscal and monetary policies, exchange rates, and supply constraints, on inflation. The results confirm that supply factors were the dominant cause underlying the increase in inflation in the euro area, whereas the exchange rate depreciations had a less significant impact.
The global Supply Chain Pressure Index, a recently constructed index by the Federal Reserve Bank of New York, has been found to have caused the price level to rise by 9.5 percentage points.