Taylor Swift's Erasu tour made waves across Europe, with everyone from royalty to Paul McCartney dancing to her three-and-a-half-hour show and economists praising the “Taylor effect” on local economies.
But the euro zone central bank chief seems to think that those who claim she now also has economic influence could benefit from a few lessons in macroeconomics.
European Central Bank President Christine Lagarde has laughed off suggestions that Taylor Swift is to blame for the region's stubborn inflation.
The latest data showed euro zone inflation fell to 2.5% in June, closer to the 2% target, but services inflation, which Swift contributes to, remains high, preventing the bank from cutting base rates a second time after sharply lowering them in June.
Because Swift's time in Europe is temporary, her contribution to inflation is not seen as “sustainable,” prompting Lagarde to be indignant and reject the idea that she is a major contributor to Europe's stubborn price rises.
“This isn't just about Taylor Swift,” Lagarde said. CNBC At the ECB forum. “Others are coming.”
Instead, Lagarde said the key indicators the ECB needs to consider before cutting rates again are rising wages for service employees and rising corporate profits.
Sweden's central bank revealed that inflation rose in the same month that Taylor Swift performed in the country, citing the Taylor Swift effect.
Sweden's Riksbank said hotel rates rose 11% in May, due to an increase in “concert tourists” following Swift around Europe — a bigger increase than when Beyoncé performed a year ago.
But while the Swift's presence may have contributed to some price increases, it represents a small slice of the broader inflation pie.
Taylor effect?
The “Taylor effect” has been documented in all the territories where she has toured extensively this year, with her American football boyfriend Travis Kelce helping to make the money and who is now reportedly attracting more lucrative sponsorship for his team. New Heights Since his relationship with Swift went public, he has been interacting with his brother Jason on a podcast.
Several banks and think tanks have carried out economic analyses that put the economic impact in the billions of dollars. The impact on Europe is expected to be greater than that of the United States, as Americans have taken advantage of the strong dollar and EU restrictions on ticket resale prices to get better deals.
Barclays Card reports that Taylor Swift's UK shows could bring £1 billion ($1.3 billion) to the British economy. But inevitably, where does that figure come from?
of Financial Times Alphaville We investigated the report and discovered some shocking figures hidden behind the calculations, including the average cost of travel to a concert being £110.80 and a pre-concert meal costing £60.
The survey was based on a small sample of 200 people who have or are “trying to secure” tickets to Swift's concerts. Barclays Card also Alphaville These figures are average responses; a more reliable median figure would be expected to be lower.
Swift is undoubtedly the preeminent figure of her generation, but analysts should look elsewhere before blaming her for Europe's brutal summer of inflation.
