Existing databases, models, analytical tools and forecasting and projection apparatuses have been overhauled and enhanced, and new ones have been added. Through our Department of Research we have invested in all areas of micro- and macroresearch that are directly and indirectly beneficial to our economic and monetary analysis. We have launched research initiatives across European countries to understand how economies work and what drives innovation, productivity, competitiveness, growth, employment, equality and so on. Let me mention just a few examples of such initiatives undertaken by the ECB and the Eurosystem: •  There is the Competitiveness Research Network, known as CompNet. Its objective is to identify what drives the dynamics of competitiveness and productivity across EU countries and heterogeneous firms, and relate the findings to policy  7  See van Beers, Bijlsma and Zwart, “Cross-country insurance mechanisms in currency unions: An empirical assessment”, Bruegel Working Paper, 2014/04. 8  See Hepp and von Hagen, “Interstate risk sharing in Germany: 1970–2006”, Oxford Economic Papers 65, 2013. 4  BIS central bankers’ speeches  outcomes. CompNet has already assembled millions of data points and observations in order to capture “non-price competitiveness”. This initiative is already showing that we need to augment our analyses with a global value chains dimension, as the internationalisation of production matters. Had we had anything similar prior to the crisis we would have been in a better position to anticipate the effects of the propagation of the crisis along the supply chain. •  There is the Household Finance & Consumption Network (HFCN).

Regression results using CSI display neither a flattening of the short-run Phillips curve nor signs of nonlinearities. The lower part of Table 1 reports the estimation results using CSI inflation. Starting with the linear specification, the full-sample and early-sample results are very similar to 2/4  BIS central bankers' speeches  those using core PCE price inflation. This is not altogether surprising since the two series track each other closely during the first half of the sample. The big difference is in the later subsample, where the coefficient on the unemployment gap is not that much smaller than in the early sample, and larger than in the full-sample estimation. Moreover, there is little evidence of nonlinearity in the Phillips curve relationship in either the full or later samples. Evidently, both the flattening of the Phillips curve and evidence of nonlinearities depend on including goods and other categories that are primarily influenced by non-cyclical factors. These results suggests that the Phillips curve is alive and kicking when inflation is measured using categories that are cyclically sensitive, rather than buffeted by supply and other shocks. Based on this analysis, the trade-offs between employment and inflation the Fed faces haven’t fundamentally changed. That does not imply there have not been meaningful changes in inflation dynamics—inflation persistence has fallen significantly for the CSI as well. This means that transitory shocks no longer get embedded in inflation expectations, but instead have relatively short-lived effects on inflation.