In the longer run, poor expectations for demand in connection with population ageing can make the picture even gloomier. Moreover, we are certainly aware – even if the risk is still remote – that holding interest rates very low for very long periods may result in fueling excessive financial risk-taking, imprudent lending practices and, ultimately, dangers for financial stability.
There is clear evidence that the introduction of the single currency and the associated increase in price and cost transparency have fostered both intra and extra-euro area trade in goods and services. In fact, the sum of intra-euro area exports and imports increased from about 31% of GDP in 1998 to around 40% in 2007 – approximately 9 percentage points.