By now we seem to have a general consensus that accommodative monetary policy conditions in developed markets laid the foundation for an aggressive search for yield, which resulted in mispricing of risk on a large scale, coupled with some over-zealous “financial innovation”.
However, it is also important to bear in mind the historic dimension of the euro area as a common European project, and the adequate approach to evaluating the exchange rate of the euro against the USD is certainly a long-term one. … How can we turn the current expansion in the euro area into a prolonged period of non-inflationary growth?