It is possible that these residuals reflect measurement errors, for example regarding economic slack. But they may also reflect, at least in part, other structural factors that are more difficult to identify and quantify. One way to gauge the potential role of these factors is to analyse the wealth of available financial market data, focusing on inflation expectations rather than actual inflation.
Chart 5 a Supply shocks likely contributed to decline in market-based inflation expectations Drivers of developments in the 10-year euro area inflation-linked swap (% p.a., cumulative changes)  Sources: ECB calculations. Notes: The model is a four variable BVAR containing the 10-year real OIS rate, the 10-year ILS rate, equity prices, and the nominal effective exchange rate.