, c. ( 2022 ), “ monetary policy in a high inflation environment : commitment and clarity ”, lecture organised by eesti pank and dedicated to professor ragnar nurkse, tallinn, 4 november. 2. this is visible, for example, if one compares the persistent and common component of inflation ( pcci ) and the pcci excluding energy. the former has been declining strongly since the summer of last year, whereas the pcci excluding energy has only stabilised. 3. for an explanation on different measures of underlying inflation, see ehrmann, m., ferrucci, g., lenza, m. and o ’ brien, d. ( 2018 ), “ measures of underlying inflation for the euro area ”, economic bulletin, issue 4, ecb and ecb ( 2021 ), “ inflation measurement and its assessment in the ecb ’ s monetary policy strategy review ” occasional paper series, no 265, september. 4. germany, france, italy, spain, the netherlands, austria and greece. 5. defined as those items in the core inflation basket for which wages account for more than 40 % of input costs. 6. according to the labour force survey, the labour force has increased by 2. 2 million since the start of last year and remains well above pre - pandemic levels, due to the rising participation of foreign workers ( + 1. 3 million ), women and older workers. 7. employment growth in the public sector has accounted for about half of total employment growth since the end of 2019. 8. kouvavas, o., osbat, c., reinelt, t. and vansteenkiste, i. ( 2021 ), “ markups and inflation cyclicality in the euro area ”, working paper series, no 2617, ecb. 9. however, the concentration of accumulated savings among higher - income households limits the extent to which this buffer can support the recovery in consumption, and the real value of excess savings has declined due to inflation. copyright 2023, european central bank

the country ’ s total working - age population moved from one state to another each year between 2000 and 2005. 10 iv ) a fourth and final feature of the process of economic and financial integration is the degree of synchronisation or co - movement between different cyclical positions across the euro area countries. this degree of synchronisation has increased since the beginning of the 1990s. in other words, a large number of euro area economies now share similar business cycles. in addition, current inflation and output growth differentials between euro area countries are relatively limited compared with the past. indeed, the decline in inflation differentials across the euro area countries has been impressive in recent years. at the beginning of the 1990s, the dispersion in inflation rates across the countries which now belong to the euro area was, on average, around 6 percentage points ( standard deviation measured in unweighted terms ). last year, the inflation dispersion was only 0. 7 percentage point. this implies that dispersion in the euro area is currently broadly in line with inflation dispersion among the 14 us metropolitan statistical areas, where it has fluctuated around 1 % in the last two decades. dispersion in real gdp growth rates ( standard deviation measured in unweighted terms ) across the euro area countries has been fluctuating around a level of 2 percentage points over the past few decades. this is similar to the dispersion observed in output growth across regions within the united states. 11 still, with a view to further enlargements of the euro area, these issues need to be kept in mind. for the proper functioning of the single monetary policy in europe all participating countries are required to display high degrees of convergence with each other and to do this on a sustainable basis. in all enlargement decisions for the euro area, we refer to some clearly defined “ convergence criteria ” and apply them in a very strict manner. we did so in the past and will do so in the future. in sum, there is evidence of growing economic and financial integration among the countries of the european union. the adoption of the euro has particularly contributed to this development by reducing information costs, enhancing price transparency and eliminating exchange rate risk between countries in the euro area. nonetheless, in some fields, europe is lagging behind the us and a lot remains to be done, for instance, in order to increase labour mobility and financial integration in retail banking. progress in these fields is clearly needed in order to