The Federal Reserve System is the central bank of one country with only one central government. In the European monetary union, a common monetary policy is combined with 19 different national fiscal and economic policies. This institutional difference makes for a difference in the costbenefit analysis of the policy options. Third, the euro area economy is more heterogeneous than the US economy.
This makes the job of the Eurosystem more complicated. Are there lessons to be learned from the US that would allow for a more even economic development in the euro area? I am confident that the answer is yes – but it might not be the answer that would readily suggest itself.