To the extent that such strategies bring us back to a very precise aim for average inflation, I fear, however, that they might end up limiting our flexibility rather than enhancing it.11 Last but not least, the ECB does not operate in a vacuum.
Whichever way central bankers will decide in designing a new monetary strategy, perhaps the most important precondition to preserve policy scope is that other policies also contribute to macroeconomic and financial stability. In the euro area, important steps in this regard have already been taken. The ECB’s scope to ease its monetary stance has benefited greatly from the improvements to EMU’s institutional architecture.