International Conference 2018 on "Understanding inflation dynamics: the role of costs, mark-ups and expectations"

25-26 October 2018 - Auditorium of the National Bank of Belgium in Brussels

Conference 2018

Controlling inflation is the main objective of monetary policy. The low inflation rates over the past few years illustrate that stabilizing inflation is not straightforward. Recently, inflation realisations have surprised on several occasions. At the global level, inflation responses to the great recession were muted, but remained persistently below target during the recovery. In that environment, it should be no surprise that inflation expectations are hovering between the credibility of the inflation objective and the persistence of the actual inflation dynamics. In Belgium, the inflation trend has shown unusual deviations from the average euro area outcome. These observations have raised questions about the contribution of regulated price components, the passing on of cost moderation and the disciplining power of competition in all sectors of the economy.

Introduction by director T. Dechaene 

Session 1: Inflation expectations
Chair: director T. Dechaene

Can inflation expectations in business or consumer surveys improve inflation forecasts?
R. Basselier, D. de Antonio Liedo, J. Jonckheere and G. Langenus (National Bank of Belgium)
Working Paper 348 – presentation
Discussant: C. Jardet (Banque de France) – presentation

Quantile-based inflation risk models
E. Ghysels (University of North Carolina), L. Iania and J. Striaukas (Louvain School of Management)
Working Paper 349presentation
Discussant: S. Manganelli (ECB) – presentation

Inflation expectations as a policy tool ?
Keynote presentation by Olivier Coibion (University of Texas – NBER)

Session 2: Price dynamics with sector and firm level shocks
Chair: director V. Magnée

International food commodity prices and missing (dis)inflation in the euro area
G. Peersman (Ghent University)
Working Paper 350 – presentation
Discussant: H. C. Bjørnland (Norwegian Business School) – presentation

Pipeline pressures and sectoral inflation dynamics
F. Smets (ECB, Ghent University and CEPR), J. Tielens (KU Leuven and National Bank of Belgium) and J. Van Hove (KU Leuven – KBC-Group)
Working Paper 351 – presentation
Discussant: H. Dixon (Cardiff Business School) – presentation

Price updating in production networks
C. Duprez (National Bank of Belgium) and G. Magerman (ECARES/ULB and National Bank of Belgium) 
Working Paper 352 – presentation
Discussant: M. Crowley (University of Cambridge) – presentation

Dominant currencies. How firms choose currency invoicing and why it matters
M. Amiti (New York Fed), O. Itskhoki (Princeton) and J. Konings (KU Leuven)
Working Paper 353 – presentation
Discussant: Ph. Sauré (Johannes Gutenberg Universität Mainz) – presentation

Session 3: Micro and macro perspectives on price dynamics
Chair: Vice-Governor P. Wunsch

Endogenous forward guidance
B. Chafwehé and R. Oikonomou (UCL), R. Priftis (Bank of Canada) and L. Vogel (European Commission)
Working Paper 354 – presentation
Discussant: D. Debortoli (Universitat Pompeu Fabra) – presentation

Is euro area lowflation here to stay ? Insights from a time-varying parameter model with survey data
A. Stevens and J. Wauters (National Bank of Belgium)
Working Paper 355 – presentation
Discussant: E. Mertens (Deutsche Bundesbank) – presentation

A price index with variable mark-ups and changing variety
T. Demuynck (ECARES /ULB) and M. Parenti (ECARES /ULB and CEPR)
Working Paper 356 presentation
Discussant: G. Gaulier (Banque de France) – presentation

Markup and price dynamics: linking micro to macro
J. De Loecker (Princeton – KU Leuven), C. Fuss (National Bank of Belgium) and J. Van Biesebroeck (KU Leuven)
Working Paper 357 – presentation
Discussant: P. Davis (Cornerstone Research) – presentation


Panel session: Price setting and inflation dynamics in the new economy
Moderator: director M. Dewatripont (ECARES /SBS-EM/ULB)
Panellist:  D. Coyle (University of Cambridge) – presentation, J. Fernald (INSEAD) – presentation, A. Walckiers (Belgian Competition Authority) – presentation


Lamfalussy lecture 
Chair: J. Smets, Governor of the National Bank of Belgium
Keynote presentation:  M. Draghi (President of the European Central Bank)