Here I see two possible dimensions. The first is positive and refers to the effectiveness of central bank actions at the margin – for example, when interest rates are close to zero. The second is normative and refers to the constraints imposed on us by our mandate and to the fears that boundaries between central bank policies and other policies might become blurred.
I will not dwell on the first dimension because I do not think that we are materially challenged in our ability to deliver our objective of price stability by the low level of interest rates. Looking back, despite extraordinarily testing economic circumstances, inflation in the euro area has remained on the whole consistent with the ECB’s objective of below but close to 2%.