This study investigates whether homogeneous clusters can be identified among Eurozone countries based on the main HICP (harmonized index of consumer prices) sub-indicators between the first quarter of 2019 and the last quarter of 2023. We use hierarchical cluster analysis to explore how different Eurozone member countries can be grouped according to the different components of the HICP that reflect differences in the main causes of inflation. We point out that the factors discussed in the inflation theory literature that affect different groups of economic agents in different ways can also be interpreted geographically within the Eurozone. Baltic countries tend to follow inflation paths that are different from those of other member states, but outliers also exist among the most advanced economies in the EU. Diverging inflation patterns have much to do with economic convergence, but the dispersion of monthly inflation rates suggests that administrative pricing and policy considerations, particularly energy policy, may be responsible for most of the divergence in inflation and will largely determine the emergence of clusters from 2022 onwards. In light of the results of our study, we conclude that there may be significant differences in the adjustments of individual countries compared to the policy measures that are optimal from the European Central Bank’s perspective.

In the present paper, we investigate the financial homogeneity of the euro area economies by contrasting eurozone countries’ responses to monetary policy steps to the theoretical assumptions of the liquidity trap phenomenon. Our assumption is that the euro area economies are not completely homogeneous. Hence, in a zero-interest rate environment, the asset holding decisions of economic agents exhibit detectable differences across countries. We verify our assumptions using Eurostat data. We use the financial asset stocks of the euro area countries to cluster the countries concerned. Previous literature has not examined changes in the ratio of financial assets to GDP, nor differences in structural changes in the total stock of financial assets under the zero lower bound. The paper uses k-centers cluster analysis based on Euclidean distance for detecting changes in the portfolio holdings of eurozone economic actors owing to economic crises and monetary policy responses. The results confirm that euro area financial markets are fragmented. There are significant differences across asset markets of different Eurozone countries, both during and after the crisis. Despite some similarities in the portfolio rearrangement across countries, the ECB’s monetary policy does not have a uniform impact on euro area financial markets, and notable differences prevail in the financial asset structures of the economies concerned.