This is a question related to the physiology of inflation, meaning how current low inflation influences economic behaviour and impacts the economy, notably through the formation of expectations. Through the filter of these two questions, I would like to use my remarks this morning to discuss the forthcoming decisions facing the Governing Council.
The delocalisation of significant sectors of industry to emerging economies like China and India, increasingly of a non-traditional type, makes productivity growth in advanced economies more difficult, as productivity grows less in the services sector. This difficulty reflects the new phase of globalisation that we have entered.