As will be discussed below, an empirical analysis by Cecchetti and Ehrmann (1999) does not find large differences in actual policy parameters between the two sets of countries. All existing inflation targets around the world are for low, positive rates of inflation.
As far as monetary policy is concerned, the demand character of the shock required a strong and fast response from monetary authorities to support the economy. (III) Instruments With inflation already low for some time before the Covid-19 crisis hit – something the ECB had been uneasy about – monetary policy has already been stretched.