leave you with three key takeaways tonight. the first is that the rise of services in production and consumption over the past few decades has contributed to lift core inflation across advanced economies – making current low inflation appear even more puzzling. the second key takeaway is that services deepening has had a profound impact on the transmission of monetary policy, also in the euro area. it has lowered the median frequency of price changes in the economy, increasing the lag with which monetary policy is transmitted to consumer price inflation. the third and final takeaway is that the service sector itself is subject to change. the rise and expansion of “ modern ” services that can be delivered at distance means that competition and aggregate productivity may increase over time, thereby contributing to reducing price rigidity. completing the single market for services in europe, and reducing barriers to trade for services, would support this process and thereby also facilitate a faster transmission of monetary policy. 33 13 / 16 bis central bankers'speeches thank you. 1 i would like to thank omar rachedi, derry o ’ brien and chiara osbat for their contributions to this speech. i remain solely responsible for the opinions contained herein. 2 for an overview, see ciccarelli, m. and osbat, c. ( 2017 ), “ low inflation in the euro area : causes and consequences ”, occasional paper series, no 181, ecb ; draghi, m. ( 2019 ), “ monetary policy in the euro area ”, speech at the conference “ the ecb and its watchers xx ”, frankfurt am main, 27 march ; powell, j. h. ( 2018 ), “ monetary policy and risk management at a time of low inflation and low unemployment ”, speech at the “ revolution or evolution? reexamining economic paradigms ”, 60th annual meeting of the national association for business economics, boston, massachusetts ; and cœure, b. ( 2017 ), “ scars or scratches? hysteresis in the euro area ”, speech at the international center for monetary and banking studies, geneva, 19 may. 3 see cœure, b. ( 2018 ), “ monetary policy and climate change ”, speech at a conference organised by the network on greening the financing system, the deutsche bundesbank and the council on economic policies, berlin, 8 november ; and nerlich, c. and schroth, j. ( 2018 ), “ the economic impact of population ageing

price changes of goods sold online, the difference between services and goods is likely to grow further. see gorodnichenko, y. and talavera, o. ( 2017 ), “ price setting in online markets : basic facts, international comparisons, and cross - border integration ”, american economic review, vol. 107, no 1, pp. 249 – 82. 19 see hoffmann, j. and kurz - kim, j. - r. ( 2006 ), “ consumer price adjustment under the microscope : germany in a period of low inflation, ” working paper series, no 652, ecb. 20 in the united states, prices are, in general, more flexible. 15 % of prices in the services sector are changed each month, compared with 22 % in non - energy industrial goods. see alvarez et al. ( 2006 ), op. cit. 21 see imbs, j., jondeau, e. and pelgrin, f. ( 2011 ), “ sectoral phillips curves and the aggregate phillips curve ”, journal of monetary economics, vol. 58, no 4, pp. 328 – 344. 22 see bobeica, e., ciccarelli, m. and vansteenkiste, i. ( 2019 ), “ the link between labor cost and price inflation in the euro area ”, working paper series, no 2235, ecb. 23 see cavalleri et al. ( 2019 ), “ concentration, market power and dynamism in the euro area ”, working paper series, no 2253, ecb. 24 see imf ( 2018 ), op. cit. 25 see also nakamura, e. and steinsson, j. ( 2010 ), “ monetary non - neutrality in a multisector menu cost model ”, quarterly journal of economics, vol. 125, no 3, pp. 961 – 1013 ; pasten, e., schoenle, r. and weber, m. ( 2018 ), “ the propagation of monetary policy shocks in a heterogeneous production economy ”, nber working paper, no 25303 ; and llaudes, r. ( 2007 ), “ monetary policy shocks in a two - sector open economy : an empirical study ”, working paper series, no 799, ecb. 26 see bobeica et al. ( 2019 ), op. cit. 27 see imf ( 2018