Editorial Director

This study has been developed in the context of the "Eurosystem Inflation Persistence Network". We thank participants in this network, the Workshop "Microeconomic Pricing and the Macroeconomy " organised at the Central European University in Budapest and an internal seminar at the NBB, in particular Jordi Galí, Andy Levin, Attila Ratfai, Christoph Weiss and Alan Kackmeister for very useful comments on earlier drafts of this paper. We thank Jerzy Konieczny, Raf Wouters and David Cornille for very insightful and stimulating discussions and Jacques Drèze for his valuable comments. We are also grateful to an anonymous referee. Finally, we thank the Federal Public Service "Economy, SMEs, Self-employed and Energy " (former Ministry of Economic Affairs) for providing us with the very rich database underlying the Belgian CPI and for carefully explaining us how the data are collected and stored, in particular Gérard Lalau, Paul Vanosselaer and Patrick Vranken. The views expressed in this paper are those of the authors and do not necessarily reflect the views of the National Bank of Belgium. All remaining errors are the authors'