Even very high national debt ratios in the euro area can be seen by the markets as tolerable as long as interest rates are low – and interest rates were indeed low throughout the euro area before the crisis.
Additionally, the last twelve months have raised an important set of questions regarding measures of real economic performance, the behavior of inflation, financial market indicators, and the growing globalization of today’s economy. I have enjoyed immensely having to grapple with these issues, but recognize that we at the central bank do not have all the answers.