Priorities for Review of the ECB’s Monetary Policy Strategy

15-11-2019

Lower neutral rates of interest have eroded the policy space necessary to fight recessions. Against this backdrop, several central banks are re-assessing how their strategy and tools can be refined to best achieve their goals. The ECB should be no exception. Its strategy review should focus on redefining the inflation objective and on developing contingency plans for using its statutory authority creatively to achieve its mandate. This document was provided by Policy Department A for the European Parliament's Committee on Economic and Monetary Affairs.

Lower neutral rates of interest have eroded the policy space necessary to fight recessions. Against this backdrop, several central banks are re-assessing how their strategy and tools can be refined to best achieve their goals. The ECB should be no exception. Its strategy review should focus on redefining the inflation objective and on developing contingency plans for using its statutory authority creatively to achieve its mandate. This document was provided by Policy Department A for the European Parliament's Committee on Economic and Monetary Affairs.

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Jérémie COHEN-SETTON, Christopher G. COLLINS, Joseph E. GAGNON