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Understanding the relative development of goods and services inflation

Author

Listed:
  • Martínez Hernández, Catalina
  • Porqueddu, Mario
  • Bayarri, Blanca Prat I
  • Gandur, Lourdes Maria Zulli

Abstract

Historically, stronger dynamics in services prices than in non-energy industrial goods (NEIG) prices have led to a persistent positive gap between services and NEIG inflation rates. However, the relative price of goods versus services rose rapidly in 2021-2022 before subsequently falling back. This box reviews this episode and examines whether the pre-pandemic trend in this relative price development provides a good benchmark for future developments, also taking into account the potential impact of structural factors related to deglobalisation, digitalisation, demographic trends and climate change. JEL Classification: E31, E52

Suggested Citation

  • Martínez Hernández, Catalina & Porqueddu, Mario & Bayarri, Blanca Prat I & Gandur, Lourdes Maria Zulli, 2025. "Understanding the relative development of goods and services inflation," Economic Bulletin Boxes, European Central Bank, vol. 2.
    • Handle: RePEc:ecb:ecbbox:2025:0002:6
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    More about this item

    Keywords

    HICP; HICP excluding energy and food;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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