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The extraordinary measures taken by the ECB to combat the financial crisis have led many observers to question whether the bank has put its independence at risk. The bank’s vow to do “whatever it takes” to save the euro has added a second (and potentially contradictory) goal alongside its...
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below the ECB’s inflation target. Therefore, a readjustment of the infl ation target seems unjustified. Furthermore, as the … ECB can expect inflation to return to its target, it possibly can accelerate tapering its unconventional monetary policy …
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Following the twin crises of sovereign debt and COVID-19, the ECB risks being stuck in a situation of fiscal dominance, in which monetary policy is subordinated to the needs of finance ministers. A strong post-COVID-19 recovery may increase inflationary pressures, requiring a shift towards a...
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- deflation or excessive infl ation. Using stochastic simulations, this article extrapolates the likely inflation rates in …
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Recent price developments in the euro area demonstrate that deflation is a serious issue of concern. Some euro area … countries are already facing a deflation in the usual macroeconomic sense of a 'general price decline'. This article discusses … the economic consequences of deflation and suggests that the ECB's expansionary monetary policy was inevitable. …
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