Third, demographics – more precisely, the assumption that dwindling labour supply will continue to exert upward pressure on wages. All these factors could turn out to be inflationary over the coming years. That is another reason why the Eurosystem must remain vigilant in this regard and ensure that inflation expectations remain well anchored around 2%. 4.
Developing the indicative guidelines requires selection of reference values or norms for each indicator, as well as rules to guide the assessment of the indicators against the norms or reference value to determine if imbalances are large. This has been done using two different methodologies – structural and statistical.