Why is inflation still struggling to recover in the euro area? The situation in the job market has improved considerably in the euro area. Nine million jobs have been created since the crisis and the unemployment rate has fallen below 8%. Compensation per employee is also recovering.
Under certain conditions, as long as monetary policy has a larger effect on inflation than it does on financial stability risk and macroprudential policy has a larger effect on financial stability risk  9  6  This argument is advanced, for example, in L. E. O. Svensson, “Monetary Policy and Macroprudential Policy: Different and Separate” (presentation to the Federal Reserve Bank of Boston’s 59th Economic Conference, Boston, Massachusetts, 2 October 2015).