Apart from making transactions with notes and coins, the general public often has very little notion of what goes on at a central bank. For most people—apart from perhaps academics and those involved directly in finance—their eyes glaze over when seemingly esoteric concepts involving monetary aggregates, transmission mechanisms and global interest parity conditions are used to explain what the institution does.
ECB staff estimates of the equilibrium real interest rate point to a significant decline over the past 10 years, even into negative territory. At face value, such estimates are consistent with the secular stagnation hypothesis. But as policymakers, can we really base our actions on such an intangible variable? My answer is no.