Perhaps labour practices and contractual institutions – dating from the early post-war decades when the economy was heavily regulated – induce distortions in large  1  A similar interpretation of “interest rate inertia” – the tendency of central banks to adjust rates in the same direction and in small steps – can be found in G. Rudebusch, “Term structure evidence on interest rate smoothing and monetary policy inertia”, Journal of Monetary Economics, Vol.
As Pope Pius XI wrote in 1931, “It is a fundamental principle that one should not withdraw from individuals and commit to the community what they can accomplish by their own enterprise and industry.”3 Individuals have to do what they can to help themselves before they seek help from the community. The same is true for the countries in the euro area.