This corresponds to the hypothetical case of an isolated and temporary change in the policy rate, and the macroeconomic impact associated with the on-going normalisation – which includes a sequence of persistent changes in interest rates that extend into expectations for the future – is likely to be larger and more persistent than suggested by these standard model responses.
I look forward to a stimulating exchange of views with you today. If circumstances were different, I would be welcoming you in person to the Bundesbank just like I did at our past gatherings. What’s preventing me from doing so this year ﬁts in here.