Christophe Blot, Jerome Creel, Francois Geerolf and Davide Romelli, Monetary Dialogue Papers, June 2026.
Abstract:
The inflation surge of 2022–2023, and the risk of recurrence following the outbreak of conflict in the Middle East in early 2026, raises fundamental questions about the appropriate monetary policy response to supply-driven inflation. We examine the anatomy of both inflationary episodes, the challenges in distinguishing between supply and demand shocks in real time, the adequacy of the ECB's response to the 2022–2023 energy crisis, and the lessons that can be drawn for responding to the current inflationary pressures.
This document was provided by the Economic Governance and EMU Scrutiny Unit at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 22 June 2026.