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THE EURO AREA HIKING CYCLE: AN INTERIM ASSESSMENT: DOW LECTURE BY PHILIP R. LANE, MEMBER OF THE EXECUTIVE BOARD OF THE ECB, AT THE NATIONAL INSTITUTE OF ECONOMIC AND SOCIAL RESEARCH, LONDON, 16 FEBRUARY 2023

Published online by Cambridge University Press:  06 September 2023

Philip R. Lane
Philip R. Lane*
Affiliation:
European Central Bank, Frankfurt, Germany
*
Email: office.lane@ecb.europa.eu
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Abstract

This analysis aims at providing an interim assessment of the ECB’s current policy rate tightening cycle. Our analysis suggests that the ECB’s monetary policy measures are tightening financial conditions and reducing credit volumes in the euro area reducing credit volumes. In view of the lags from financing conditions to the real economy, the impact of the policy tightening cycle on inflation can currently be observed only to a limited extent. The scale of the policy tightening required to return inflation to the two percent target over the medium term will need to be regularly reviewed, in view of the uncertainty about the transmission mechanism and in line with the incoming evidence concerning underlying inflation dynamics.

Keywords

monetary policy tighteningmonetary policy transmissioninflation targeteuro area
Type
Lecture
Information
National Institute Economic Review , First View , pp. 1 - 31
Copyright
© The Author(s), 2023. Published by Cambridge University Press on behalf of National Institute Economic Review

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