ECB staff estimates that the stock of accumulated excess savings amounted to € billion in the first quarter of this year, or 7.4% of annual disposable income in 2019.6 The other factor relates to non-linearity.
Research by Goldman Sachs finds that, when cost pressures are within the historical norm, the pass-through of input costs to output prices is typically low and short-lived in the manufacturing sector (right chart slide 14). But at times of significant cost pressure, like today, pass-through is almost complete as firms seek to protect their margins.