Given the previous historical excursus, and despite the current encouraging signs around the inflation situation, we may wonder whether the euro area will experience the long persistence of inflation observed in many countries during the 1970s.
Global financial markets have been unstable due to continued disruptions stemming from the U.S. subprime mortgage problem. Although overly pessimistic views about global financial markets have subsided compared with some time ago, the deterioration in the functioning of the U.S. and European markets for securitized products has remained significant and strains in money markets have persisted.