4  BIS central bankers’ speeches  will extend the benefits of micro-level reforms to the macroeconomy.
The empirical debate is also still raging over the short-term impact of such reforms on output, especially at the lower bound.11 And the optimal pace of supply side reforms has not been established empirically, although recent euro area experience teaches us that gradualism can entrench disinflationary expectations in a much deeper way than a one-off adjustment would have achieved.12 Neither is the optimal sequencing of structural reforms sufficiently well understood beyond the general concensus that such reforms should initally be more demand than supply-enhancing, hence focused more on product than on labour markets at the outset, in order not to add to a deflationary wage/price spiral.