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MNI BRIEF: Optimal EZ Price Target May Vary By Region -Study

(MNI) LONDON

France, Germany, and Italy need significantly positive, albeit very different, target rates of inflation to minimise the economic welfare costs of distorted relative prices and increases in average mark-ups, a working paper published Tuesday by the European Central Bank concludes.

A range of 1.1%- 2.1% in France, 1.2%-2.0% in Germany, 0.8%-1.0% in Italy bests aligns prices with their efficient values, Klaus Adam, Erwan Gautier, Sergio Santoro and Henning Weber argue, in the study that appears shortly after the ECB formally adopted a symmetric 2% inflation target.

MNI London Bureau | +44 20 3983 7894 | luke.heighton@marketnews.com
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MNI London Bureau | +44 20 3983 7894 | luke.heighton@marketnews.com
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