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 with a ... (full story)