Therefore, this episode can be seen as an example of successful separation. LDI: targeted action to ensure financial stability without interfering with price stability Another example from the high inflation period is the Bank of England’s intervention in the autumn of 2022 to address dysfunction in the long-dated UK government bond market.
Regarding demand, only a few countries have financial scope to stimulate consumption and, more importantly, to increase public investment in a context of very low interest rates. That is the answer that Bernanke and Blanchard suggest to dispel the risks of secular stagnation. The reality is nevertheless that Europe as a whole is still pursuing consolidation to achieve a reduction of debt ratios.