Recent analysis suggests that higher average inflation harms growth and welfare, whereas higher inflation volatility has a harmful impact on welfare and is likely to negatively affect growth. 16 There is also empirical evidence showing that  12  OECD (2003): The Sources of Economic Growth in OECD Countries. OECD, Paris. 13  See Blanchard, O.
(2004): “The economic future of Europe”, The Journal of Economic Perspectives, vol. 18, pp. 3-26; and also Gordon, R. J. (2004): “Two centuries of economic growth: Europe chasing the American frontier”, CEPR Discussion Paper, No. 4415. 14  See, for example, Genre, V., R. Gomez-Salvador and A. Lamo (2005): “European Women: Why do(n’t) they work”, ECB Working Paper Series, No 454, March 2005.