Conclusion Volatility is a fact of life in both the real economy and financial markets. But a reduction in the variability of output, inflation, and interest rates is generally to be welcomed.
Despite the fact that a large number of unforeseeable and adverse macroeconomic and geopolitical shocks have hit the euro area economy since 1998, inflation in the euro area has remained on average in the close vicinity of 2%. It is – therefore – remarkable that even amidst such disturbances, inflation expectations have remained anchored at levels consistent with price stability over the medium term.