This conference may be a good opportunity to put our glassmakers into the limelight, for a change, and to tell them, at the same time, how we would like our glasses to be even better polished in the future. In any case, it is clear that producing euro area statistics is all about teamwork: time and time again, from the preparatory stage to publication.
In this case, expectations for future inflation rates are fixed to actual past inflation rates. The other is forward-looking expectation formation, where future inflation rates are predicted in line with the underlying mechanism of future developments in economic activity. As an example, let us simply consider the Phillips curve and assume that prices rise when economic activity improves.