The system of Eurozone central banks has recently taken a large step away from traditional inflation targeting towards more active policies aimed at also guaranteeing financial stability. One can doubt the effectiveness of the new policies which, after all, are new. And unemployment is only mentioned in passing though the new policies implicitly admit that the post 2008 rise in Eurozone unemployment was not caused by rigid labour markets. But by a crisis. Despite this the new policies are a very welcome (though severly overdue) step ahead: they admit that too much credit is a dangerous thing, especially when it leads to asset price increases.
Real-World Economics Review Blog
Central Banking in the Eurozone: moving away from ‘inflation targeting’ Merijn Knibbe