I am therefore convinced that there is no meaningful alternative to the present ECB strategy in the euro area’s current situation. The limits of monetary policy with regard to overcoming a deep and long-lasting crisis of the real economy have become very obvious in the recent past.
There is a large variety of problems that are at the core of this crisis, ranging from political to structural problems, but also including demand aspects. From the point of view of macroeconomic theory it should come as no surprise that economic dynamics – and especially investments – are influenced by both supply-side and demandside factors.