20 Let me conclude my discussion of household borrowing by touching on one of the most-cited statistics—the ratio of household debt to disposable income. Some observers have stressed that this ratio is likely to increase in the near term, which poses a threat to financial stability.
On the other hand, the transmission mechanism of monetary policy can be impaired by overly rigid economies, preventing monetary policy decisions to be properly reflected in price developments. In particular, structural rigidities may imply that monetary policy decisions affect prices and inflation rates only with a substantial lag.