Maintaining price stability with unconventional monetary policy measures
Very informative speech by Peter Praet, the European Central Bank's chief economist, in which he describes the decision making process in the ECB, and which tools it implemented after the beginning of the financial crisis. Reproduced with courtesy from the ECB's website . I was fortunate to be able to attend the MMF conference in London where the speech was delivered. The euro area continues to experience a solid, broad-based and resilient recovery. Deflationary risks have disappeared and some measures of underlying inflation have ticked up over recent months. But overall inflation developments, despite the solid growth, have remained subdued. Accordingly, while we remain confident that inflation developments will eventually return to levels below, but close to, 2% our medium-term objective, the evidence still shows insufficient progress towards a sustained adjustment in the path of inflation towards those levels. Such “sustained adjustment” is the principal contingency tha