• Economic analysis

    One pillar of the ECB’s framework for conducting a comprehensive analysis of the risks to price stability, which forms the basis for the Governing Council’s monetary policy decisions. The economic analysis focuses mainly on the assessment of current economic and financial developments and the implied short to medium-term risks to price stability from the perspective of the interplay between supply and demand in goods, services and factor markets at those horizons. In this respect, due attention is paid to the need to identify the nature of shocks affecting the economy, their effects on cost and pricing behaviour and the short to medium-term prospects for their propagation in the economy (see also monetary analysis).