And as we worked to update our monetary policy framework, we hosted a series of listening events across the country before and during the pandemic, and these conversations factored importantly into our thinking and our new framework.
At the same time, they added an element of instability to monetary union. Hence the need to “rebalance Europe”. One channel through which unsustainable current account positions can be rebalanced is the exchange rate. In a monetary union, however, using the exchange rate is obviously no longer an option. The only option left is an internal adjustment through prices, wages, employment and output.