In a recent study Borio and Filardo (2006) find that for many euro area countries the global output gap is statistically significant in explaining domestic inflation, while the contribution of the domestic output gap is reduced, especially since the 1990s.
However, the markets have not (yet) rewarded these efforts. Important policy initiatives still have to be introduced in the financial markets as well. The introduction of the euro has succeeded in ending the segmentation into different national currency zones and in intensifying the competition in individual market areas. Some obstacles to the integration process only really became apparent once this had been achieved.