That aggregate probability distribution of two-year-ahead inflation expectations has evolved in three dimensions that provide confidence that inflation adjustment is sustainable. The mean of the distribution has increased, the dispersion of the distribution has narrowed, and the downward skew has declined.
With regard to Europe, the finalisation of a common services market and a single digital market are promising initiatives. Studies suggest that this could yield double the growth effects unleashed by the creation of the common market for goods.9 10 By the same token, unleashing the forces of the market would not only serve growth.