Report
Why is inflation higher in the United States than in the euro zone?
Headline and core i nflation are higher in the United States than in the euro zone, both on average historically and at present . This has significant implications for monetary policies, interest rates, etc. What are the possible explanations? Faster growth in unit labour costs in the United States, independently of inflation? If so, why? What differences are there in wage formation? Rising profit margins in the United States relative to the euro zone? If so, one explanation may be the proliferation of companies with dominant positions in the United States; A chronic situation of excess demand for goods and services relative to supply in the United States , and not in the euro zone , that is not entirely offset by imports? The last two explanations (profit margins, excess demand) play a role, but the first (wage formation and labour cost growth) does not at all.
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Natixis
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Patrick Artus
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