The far reaching implications of central bank decisions have prompted a debate about the limits of their mandates and the legitimacy of their actions. With respect to the euro area, some have even dubbed the ECB the only game in town. These days the ECB’s role in Greece’s fate has spurred an intense debate.
Some of the gloom about the economy during the past year had to do with the perception that the stimulus to economic activity from the decline in interest rates was taking a long time to have its effects on spending and employment.