But after the crisis, lower domestic demand in “non-core” countries was not offset by higher domestic demand in core countries. Rather, domestic demand fell everywhere, which contributed to underlying inflation being compressed (Chart 4, right panel).
Chart 4 Domestic demand and core inflation in the euro area (left panel: percentages of GDP; right panel: percentages per annum, HICP excluding food and energy)  Sources: ECB and Eurostat. Note: Non-core refers to Spain, Italy, Greece, Portugal and Cyprus. This fall in underlying inflation was not visible to the same extent in the United States, which relied more on internal demand.