Vítor Constâncio: In defence of monetary policy Opinion piece by Mr Vítor Constâncio, Vice-President of the European Central Bank, 11 March 2016. *  *  *  This week the ECB adopted new measures to reinforce its monetary policy in the face of recent headwinds. That decision was taken against a backdrop of vocal scepticism in the media and markets.
The sceptics’ reasoning is two-pronged. First, that monetary policy is not sufficient to address the present low growth trend; and second, that monetary policy is increasingly ineffective in any case. The notion that monetary policy alone cannot raise trend growth is mostly true but trivial, especially if the challenges of secular stagnation highlighted by Robert Gordon in his brilliant new book are considered.