Conducting monetary policy is a simple task in theory. In practice, there are many complications. The European Central Bank has managed a very difficult period following the onset of the financial crisis and subsequent European debt crisis. With the improved economic outlook, monetary policy could appear easier. However, the ECB is not in for a walk in the park1.
The objective of monetary policy is well defined: price stability. In the euro area, price stability is defined as the famous “below
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