14  BIS central bankers’ speeches  Issing, O. (2006), “The ECB’s Monetary Policy Strategy: Why did we choose a two Pillar Approach?”, contribution to the 4th ECB Central Banking Conference, Frankfurt, November. Jarociński M. and M. Lenza (2016), “An inflation-predicting measure of the output gap in the euro area”, ECB Working Paper 1966, forthcoming article in the Journal of Money, Credit and Banking.
While domestic demand has been firm, growth in external demand has been sluggish, reflecting the deceleration of the global economy – caused by the European economy’s stagnation due to the European debt problem, a slowdown in the Chinese economy due to monetary tightening, and the flooding in Thailand – as well as the continued appreciation of the yen.