14 Other makeup strategies seek to reverse shortfalls in policy accommodation at the ELB by keeping the policy rate lower for longer than otherwise would be the case. 15 In many models that incorporate the ELB, these makeup strategies lead to better average performance on both legs of the dual mandate.
So to some degree the two are complements rather than substitutes. In other words, the EMU needs both. The recent Recovery and Resilience Facility that I already mentioned, is a telling example of such cross-border public risk sharing. The fund was set up to temporarily support public investments in the energy transition and in digital projects all over Europe.