There is little empirical support for the thesis that global spare capacity, or slack, is increasingly important as a factor determining the eurozone’s inflation rate, a paper published by the European Central Bank argues. 

Claudio Borio, head of the monetary and economic department at the Bank for International Settlements (BIS), argues in favour of the global slack view in a recent paper co-authored with Raphael Auer and Andrew Filardo. Auer, Borio and Filardo’s paper, The globalisation of