Going forward, I expect that there will be less fiscal drag on the economy in 2014 than we saw in 2013. Moreover, rising home prices and stock prices have helped improve consumer balance sheets. I have frequently noted that one reason for the less-than-robust growth in consumption during this recovery has been the deleveraging efforts by consumers.
Still, almost ten years after the onset of the financial crisis and five years after the start of the sovereign debt crisis, the slack in the euro-area economy persists. A number of questions are being raised on the functioning of the expansionary measures recently adopted by the Eurosystem.