We perform four simulations with the multi-countrymodel EUROMON illustrating both upwards and downward risks to future inflation in the Euro area. We examine how different sources of inflation can affect, first, the Euro area as a whole in comparison to the US, and second, compare the effects between the various EMU member countries. The shocks examined are (i) a wage increase all over the Euro area, (ii) an asymmetric wage increase in Germany but not in the other EMU member countries, (iii) an oil price rise, and (iv) a dollar depreciation.
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