Jean Claude Trichet: Hearing before the Economic and Monetary Affairs Committee of the European Parliament Speech by Mr Jean Claude Trichet, President of the European Central Bank, at a hearing before the Economic and Monetary Affairs Committee of the European Parliament, Brussels, 11 September 2007.
Part of this miscalculation reflected a judgment that the economy and financial markets were fragile and that small changes in market interest rates would have major effects on aggregate spending (for example, as a result of disintermediation induced by ceilings on the interest rates that banks and thrifts could pay). But, in addition, the size of the output gap was not correctly perceived.