Taylor Swift’s tour across Europe was a revelation. Everyone from the royal family to Paul McCartney danced to her three-and-a-half-hour concert, while economists rushed to praise the “Taylor effect” on the region’s economy.
But the eurozone central bank president seems to think that people who claim she has become an economic powerhouse could benefit from two or three lessons in macroeconomics.
European Central Bank President Christine Lagarde laughed off suggestions Taylor Swift was to blame for the region’s stubborn inflation.
the Last reading Eurozone inflation fell to 2.5% in June, European Central Bank data showed, close to its 2% target. However, service sector inflation, which Swift’s presence would help to drive up, remained high, preventing the bank from cutting interest rates for a second time after cutting its benchmark rate in June.
Because Swift’s presence in Europe is temporary, its supposed contribution to inflation will not be “fixed.” This prompted an exhausted Lagarde to dismiss the idea that it was a significant contributor to the continent’s stubbornly high prices.
“It’s not just Taylor Swift, you know, there have been others who have come,” Lagarde told CNBC at the European Central Bank Forum.
Instead, Lagarde said higher wages for service workers and higher business profits were the key criteria to consider before the ECB could cut interest rates again.
Sweden’s central bank pointed to the Taylor Swift effect when it revealed a rise in inflation in the same month the singer performed a concert in the country.
Sweden’s central bank said hotel prices rose 11% in May, driven by “concert travelers” following Swift across the continent. That was a bigger increase than when Beyoncé performed a year ago.
However, while SWIFT’s presence may have contributed to some price increases, it is a small part of the broader inflation pie.
Taylor effect?
The “Taylor Effect” has been documented in every territory she’s been to on her massive tour this year. It’s even helped her footballer boyfriend Travis Kelce make money, as he said he now has more lucrative sponsors for his tour. new Horizons Podcast with his brother Jason since his relationship with Swift became public.
Several banks and research centers have published economic analysis studies that estimate the economic impact of this incident in the billions. The impact in Europe is expected to be greater than in the United States, as Americans took advantage of the strong dollar and the regulations imposed by the European Union on resale prices of tickets to get a better deal.
Taylor Swift’s legs in the UK could add £1 billion ($1.3 billion) to the country’s economy, a report by Barclaycard suggests.
the Financial Times Alphabet Researchers investigated the report and found some startling figures behind the calculation, including an average travel spend of £110.80 to get to her concerts and £60 on a pre-show meal.
The survey was based on a small sample size of 200 people who either had tickets or were “looking to secure” tickets to one of Swift’s concerts. Barclaycard also reported: Alphaville The figures were average responses, with the more reliable average expected to be lower.
There is no doubt that SWIFT is a generational force, but analysts should look elsewhere before blaming it for Europe’s brutal summer of inflation.