But the general point that I would like to emphasise is that although a higher level of short term rates can be expected to dampen growth in principle, it may not dampen growth in practice because of the influence of other factors, including those that determine the functioning of labour markets and productivity growth.
Could it be that the recent move by the ECB represents a case where increase interest rates might stimulate growth? I would agree with this. Public perceptions and expectations of future inflation should be favourably influenced by a change in the monetary policy stance that aims at preserving price stability.