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The 2020-2022 inflation surge in Europe is analyzed in this paper, which finds that Phillips curve parameters vary significantly across countries. The authors thank several individuals for their contributions and acknowledge the IMF's internal review process for helpful comments. The paper's key findings suggest that supply-side shocks, monetary policy, and pandemic-related factors have contributed to the inflation surge, and that the response of monetary policy has been crucial in mitigating inflation differentials across countries. The paper concludes by highlighting the importance of understanding the drivers of inflation in order to inform policy decisions.
