Capital controls might be applied to contain inflows, but they are not allowed in the EU. 10  See Allsopp and Vines (1998). 11  “Inflation, Expectations and Current Challenges to Monetary Policy”, speech at the European Inflation-Linked Conference, Rome, 10 October 2005.
12  In addition, low nominal interest rates may be also, if not more, important that low real interest rates in leading to asset price misalignments; see Shiller (2007). 4  BIS Review 135/2007  2.4  Summing up  What can we learn from all this?