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The ECB Needs a New Mandate
The European Central Bank’s decision in September to pursue more monetary-policy easing was controversial, with one board representative, from Germany, resigning over the move. But one of the most remarkable features of the ECB’s position has not gotten enough attention: the admission that inflation expectations have become de-anchored, and that without fiscal-policy support, the central bank will probably fail to fulfill its price-stability mandate for the foreseeable future. In fact, many observers, and even several members of the ECB’s Governing Council, now argue that the bank needs to adapt its mandate ... (full story)