Hence, developments in productivity growth are relevant for the monetary policy of the ECB to the extent that they have an influence on medium term deviations from price stability in the HICP for the euro area. What are the potential risks to price stability in the medium term coming from productivity developments? Some would give very simple and straightforward replies.
The euros in our pockets are, after all, only pieces of printed paper. Their value lies in the shared conviction that this so-called fiat money can be used as a means of exchange, as a unit of account and above all as a store of value. “All money is a matter of belief ”2.