The debate seems to lie far back in time. But problems of time inconsistency are at the very heart of monetary policy, and our strategy has to take due account of it. The subject is currently on the table in the Eurosystem as part of our strategy review. And I shall go into some key issues of the review later.
Even with independent central banks, monetary and ﬁscal policy still interact. The economist Eric Leeper once summed it up as follows: “[Both] policies are intricately intertwined and their distinct impacts are diﬃcult to disentangle.