And it certainly seems possible that a portion of the extraordinary productivity growth of recent years represents a permanent increase in efficiency. According to proponents of this view, some of these productivity improvements may have resulted from firms’ focusing on restructuring and cost-cutting in ways that provide ongoing efficiencies.
Only then will our monetary policy be able to normalise again. We also need reforms which lead in particular to greater flexibility in labour and product markets and increase productivity. Because we have a mandate that says that we have to achieve an inflation rate of below, but close to, 2% over the medium term.