Ok, let’s pause here for a moment. I realize that for some of you, this was all a bit intense. Sometimes, the economics professor in me gets the upper hand. Yet it’s useful to grasp some basic theory, in order to appreciate what happened in the euro area over the past ten years and to understand the policy challenges that lie ahead of us.
As a reassurance, and maybe disappointment for others, the hardest part is behind us. Now the real fun begins. But before we continue, what do you need to have taken in so far? We’ve seen that, in normal times, the mix of monetary and fiscal policy is important for stabilizing the economy.