[9]  Uncertainty about growth That said, these shocks also have implications for growth and, as such, they can weigh on the medium-term inflation outlook. So what are we seeing in this regard? The external supply shocks hitting the euro area are affecting spending. Rising import prices represent a terms of trade “tax” which reduces the total income of the economy.
(2014), “Hazardous Times for Monetary Policy: What Do Twenty-Three Million Bank Loans Say About the Effects of Monetary Policy on Credit Risk-Taking?”, Econometrica, Vol. 82(2), March, pp. 463–505. With a more resilient banking sector in the euro area, we have seen this more positive picture develop. Credit risk exposures in banks’ loan books have declined as monetary policy has eased.