Specifically, I expect the current monetary policy stance to strengthen aggregate demand in the euro area on the back of lower real interest rates and improved confidence. Higher actual and expected inflation closer to our price stability objective also help alleviate the real debt burdens of households, firms and governments, which otherwise could have been subject to adverse debt dynamics.
BIS Review 118/2007  7  with the largest price changes, both positive and negative (though the Dallas measure is asymmetric). 7 Other approaches to estimating core inflation are theory-based measures employing common trends, unobserved components, or a particular model of the economy.