Sure, for the core, no for the title:
Determine 1: Month-to-month annualized core inflation hole between america and the euro zone (blue), common 2019-2021M02 (pink), common 2021M03-2022M08 (inexperienced). Inflation calculated as logarithmic variations on the CPI (United States) and the HICP (euro zone). Seasonally adjusted HICP utilizing X-13 census, logarithmic transformation, X-11 adjustment. The NBER has outlined peak-to-trough recession dates as shaded. Supply: BLS, Eurostat by way of FRED, NBER and writer’s calculations.
Core inflation in america after the ARP elevated considerably greater than within the euro zone – 2.2 share factors, statistically vital on the 10% stage. One might interpret this as an excessively aggressive stimulus; alternatively, one might think about the stimulus plans for the euro zone as insufficiently aggressive. In different phrases, it isn’t like we obtained nothing with the additional inflation.
In the end, when it comes to the inflation that customers face, the Eurozone has seen the identical acceleration in inflation as america. That is proven by the corresponding graph of headline inflation differentials.
Determine 2: Annualized month-to-month inflation differential between america and the euro zone (blue), common 2019-2022M08 (pink). Inflation calculated as logarithmic variations on the CPI (United States) and the HICP (euro zone). Seasonally adjusted HICP utilizing X-13 census, logarithmic transformation, X-11 adjustment. The NBER has outlined peak-to-trough recession dates as shaded. Supply: BLS, Eurostat by way of FRED, NBER and writer’s calculations.
Eurozone inflation rose relative to america with the leap in pure fuel costs from June/July 2021. If one had been to verify for a change within the variations to 2021M07, one would discover that inflation euro space accelerated by 1.4 share factors (statistically vital at 10% stage).
It’s attention-grabbing to see what this implies for client value ranges. Normalizing to 2021M03 (ARP go), we’ve the next.
Determine 3: US-euro space log value stage (blue). Seasonally adjusted HICP utilizing X-13 census, logarithmic transformation, X-11 adjustment. The NBER has outlined peak-to-trough recession dates as shaded. Supply: BLS, Eurostat by way of FRED, NBER and writer’s calculations.