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The ECB between the Fed and the Recovery Fund – Sergio De Nardis - Inpiù

Central banks are reviewing their strategies. The changes in the economic context exacerbated by the pandemic and the loss of effectiveness of the measures (conventional and otherwise) to pursue their mandates are pushing the monetary authorities to make revisions: the decline of the natural rate of interest consistent with price stability and full employment and the un-anchoring of inflation expectations with respect to the objectives increases the frequency with which the policy interest rates managed by the central banks are lowered to the limit beyond which they cannot fall. The result is an inability of monetary policies to fight recessions and raise inflation.

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