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Ferdinando Giugliano

Why Christine Lagarde Cares About Your House

It makes little sense to calculate inflation without including costs for people who own their homes. The ECB should follow the Fed’s lead.

Home sweet home.

Home sweet home.

Photographer: Bloomberg/Bloomberg

The European Central Bank faces many thorny issues as it embarks on its first monetary policy strategy review in nearly two decades. From the setting of the bank’s inflation target, to its role in tackling climate change, the famed diplomatic skills of President Christine Lagarde will be tested.

One aspect of the review should prove uncontroversial, however: The ECB should do a better job of including housing costs in its definition of inflation.