Moreover, if the positive influence of the strength in the corporate sector feeds through into the household sector more slowly than expected due to sluggish wage growth, supply and demand conditions for consumer goods and services may not improve as much as the output gap suggests. In such a situation, prices may not be responsive to the improvement in the economic situation.
Yves Mersch: Competitiveness of Europe and European financial markets Panel contribution by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the 30th edition of the workshop "The Outlook for the Economy and Finance", Villa d'Este, Cernobbio, 6 April 2019. * * * To increase competitiveness is the main driver for higher potential growth.