Over the past two decades, central banks in advanced and emerging economies adopted monetary policy frameworks with price stability as the primary objective. Monetary policy worked through interest rates and therefore, only influenced current and future expected short-term interest rates, which in turn, impacted on long-term interest rates and asset prices.
Especially, since the relatively strong balance sheets of German households, businesses, and of the public sector provide a certain degree of stability not only for Germany, but for the euro area as a whole. We have to accept the structural differences between economies. This brings me back to the main points of my speech. First, that diagnosing fragmentation requires normative judgement.