This may well give cause for concern since it suggests that the differentials originate from the fact that adjustment mechanisms in the euro area are not functioning as smoothly as they might and that policies other than monetary policy are not consistent with inflation rates close to the euro area average.
A wide variety of modelling and analytical approaches are required to gain the necessary comprehensive understanding of the economic, financial and social impact of these structural changes, including the interaction effects between digitalisation and the carbon transition. Digitalisation and the greening of the economy require significant levels of investment, both from the private sector and the public sector.