The review took the ECB’s mandate and primary objective of price stability, which is conferred by the Treaty, as a given. At the same time, we thoroughly looked at key aspects of citizens’ lives. We have recommended a roadmap to include the costs of owner-occupied housing in the Harmonised Index of Consumer Prices to better represent the inflation rate that is relevant for households.
Interestingly, results from empirical analysis at DNB have shown that countries with comparatively large bilateral FDI positions tend to have a higher correlation of output growth rates. In other words, FDI may intensify co-movement of business cycles. In particular, this appears to be the case in the period 1995-2001.