The truth of the matter is that given the lack of historical precedents on what the impact of a major economy departing from a zero lower bound environment is, market analysts and policy makers do not have much of a choice other than “learning in real time”.
While recent work in academia and policy institutions has improved our understanding of the transmission mechanisms that give rise to global spillovers, we still live with more open questions than answers. In the remainder of my remarks, I would like to discuss the spillovers generated by monetary policy in the US and in the euro area in more detail.