(2014), “Structural reforms: learning the right lessons from the crisis”, speech at the Bank of Latvia Economic Conference 2014, Riga, 17 October 2014. 6  For more on this point see Draghi, M. (2015), “Structural reforms, inflation, and monetary policy”, introductory speech at the ECB Forum on Central Banking, 22 May 2015.
In this setting, monetary policy needs to be even more forward looking than usual, seeing beyond the shutdown to its potential implications for the subsequent recovery. The loss of household wealth coupled with self-reinforcing weakness in business and consumer confidence could continue to weigh on aggregate demand after the restrictions are lifted. Some businesses will fail, and workers will not regain their old jobs.