Those finding themselves inside bubbles (ex post) are always unable to recognise it ex ante. At the practical level, lobbyists, lawyers and enlisted media will be used to sell the idea that “this time it’s different” and that there need be no policy resistance to macroprudential concerns.
There is not enough time for me to address the necessary structural reforms. I should say, however, that, by improving the functioning and expanding the productive capacity of the euro area economy, greater market flexibility and higher productivity growth would also enhance the scope for monetary policy’s scope for supporting stronger demand without jeopardising price stability.