The end of mumbling incoherence: Enhancing credibility, effectiveness and trust
through better central bank communication - Governor Gabriel Makhlouf
26 February 2020 Speech
Remarks at the 6th DIW Lecture on Money and Finance
Introduction
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Thank you, I am very pleased to be here today.
Since I joined the Governing Council last September, there has been much speculation about our review of monetary policy
strategy, the rst since 2003 and recently launched by President Lagarde.
Such a review is good practice. Since the economy evolves and develops over time, so too do the challenges for economic policy
more broadly and for monetary policy. Taking a step back from the day-to-day conduct of policy to reect on the bigger picture
allows us to ensure that our approach remains t for purpose.
We can and should periodically question the assumptions underlying our decision-making. Some of these are important for our
understanding of the environment in which we operate. For example:
How has demography, technology and greater global interconnectedness affected the natural rate of interest?
What is the role of structural reform and scal policy in supporting monetary policy objectives?
How do macro-prudential policies and monetary policy interact?
How do the signicant technological changes of recent years, combined with structural shifts induced by the crisis, affect our
understanding of the economy?
While most of these issues are largely outside the control of monetary policymakers, we should consider them when making
decisions.
In contrast, some questions are within our power to control:
What do we mean by price stability?
Is our measure of ination the right one?
Are we communicating well enough?
Today I will focus on questions that are within the power of the Governing Council to impact directly. In particular, I want to
explore the role and evolution of central bank communication, and how we can continue to develop our dialogue with the public.
Central Bank communication - how did we get here?
Not so long ago, successful monetary policy was believed to be mainly a matter of managing overnight interest rates effectively;
communication with the public was of little concern for central bankers.
This held true even in the years following the radical institutional reforms that made monetary policy conduct increasingly
independent from governments.
Such reforms followed the understanding that governments' objectives are sometimes at odds with central banks maintaining
price stability. The public can read such misaligned incentives, anticipate the likely course of policy action, and consequently
frustrate its effectiveness.
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Robert Lucas pointed out that relationships between macroeconomic variables are inuenced by economic policy itself (Lucas).
As a result, any policy analysis that ignores expectations, and how they evolve and respond to economic policy, is likely to be
inaccurate.
Advancing on Lucas' line of reasoning, Finn Kydland and Edward Prescott showed that a policymaker aiming to maximise the well-
being of citizens, if given the opportunity to re-optimise and change plan later, will generally do so (Kydland & Prescott,
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1977). The public, however, will ultimately realise that future policy action may differ from that which was previously announced,
unless the policymaker is able to make binding commitments.
In other words, a time consistency and credibility problem can affect expectations and frustrate policy effectiveness. This is
especially true for monetary policy, given that the relationship between ination and unemployment - the so-called Phillips curve
- provides monetary policymakers with incentives to generate surprise ination.
This increased awareness about the importance of expectations contributed to shaping modern central banking. These lessons
informed the radical reforms carried out during the 1980s, which focussed on mitigating the time consistency problem by
assigning central banks with clear mandates and increasing the independence of monetary policy action from governments.
However, there was still little role for central bank communication with the public following the implementation of these reforms.
Monetary policymakers, no matter how committed to price stability, said as little as possible; the very limited communication they
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used to provide was generally quite cryptic and inaccessible to the public (Blinder et al 2008).
In 1987, for example, the then-Chairman of the Federal Reserve Alan Greenspan said, "Since I've become a central banker, I've
learned to mumble with great incoherence ... if I seem unduly clear to you, you must have misunderstood what I said" (Blinder et al
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2001). And even until the mid-1990s, the Federal Reserve did not announce changes in its target federal funds rate on the day of
the monetary policy meetings; markets had to infer them from the type and size of open-market operations put in place.
Why were central banks so reticent to communicate?
Part of the reason may have been natural caution, and part of it was probably that central banks were keen to protect their hard
won independence. Being open and transparent may have encouraged debate on policy, raising the possibility of pressure to act
differently. By contrast, minimal communication could safeguard independence.
Today, central bank independence is more rmly established. Central banks have begun to communicate more. And, to be fully
consistent with the lessons provided in the 1970s by Lucas, Kydland and Prescott, a central bank must be transparent, honest and
not afraid to engage with those outside the central banking community.
Why is that?
Transparency, honesty and engagement help to build credibility and to set expectations.
Credibility and trust are essential elements for monetary policy to be effective.
Credibility requires that a central bank's objectives are clearly dened and monetary policy action is not inuenced by conicting
goals.
Expectation-setting requires a central bank to communicate clearly both its objective and how it intends to achieve it.
This requires, in turn, that the public understand the mission of central banks, recognises the importance of that mission, and
trusts in its commitment to deliver. All this requires effective central bank communication.
Therefore, starting from the late 1990s - so well before the dramatic changes produced by the global nancial crisis - a
substantial evolution in thinking about central bank communication began.
In 1996, Alan Blinder argued that effective communication is instrumental to enhance the efcacy of monetary policy. Providing
markets with more information helps expectation formation and creates a virtuous circle. In Blinder's words, "by making itself
more predictable to the markets, the central bank makes market reactions to monetary policy more predictable to itself. And that
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makes it possible to do a better job of managing the economy" (Blinder 1998). In 2001, Michael Woodford pushed this argument
even further, stating that "successful monetary policy is not so much a matter of effective control of overnight interest rates... as of
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affecting... the evolution of market expectations" (Woodford 2001).
Since then, we have seen the role and impact of central bank communication steadily increasing. In the past, central banks used to
ask themselves if there was a good reason to communicate something; now they rather ask whether there is a good reason not to
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communicate (Skingsley 2019). The days of learning to "mumble with great incoherence" are over. Alan Greenspan's successor,
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Ben Bernanke, observed that "monetary policy is 98 percent talk and only two percent action" (Bernanke 2015).
This revolution in thinking is reected in the communication that nowadays central banks provide systematically on different
aspects of monetary policy. These include the central bank's overall objectives and their consistency with the mandate, the
monetary policy strategy (or 'reaction function'), the rationale behind the policy decisions undertaken, the assessment of the
macroeconomic outlook that informed such decisions, and the expected future course of monetary policy action.
Communicating monetary policy in the post-crisis era
Following the global nancial crisis, the need for open and transparent communication in each of these different aspects of
monetary policy has become even more important.
In the face of the unprecedented challenges produced by the crisis, central bank remits expanded dramatically. Central banks had
to provide a thorough assessment of the negative shocks hitting the economy, as well as their foreseeable consequences. They had
to explain their actions carefully and the expected transmission channels of new monetary policy instruments. They had to
reassure a confused public of their ability and enduring commitment to tackling these challenges.
Central banks around the world combined interest rate reductions with new non-standard monetary policy tools. As central banks
approached the effective lower bound on interest rates, it became necessary to affect the entire yield curve and not only short-
term rates. Monetary policy could successfully achieve this thanks to the use of forward guidance - that is, communicating the
explicit commitment to a certain path of future policy rates - complemented with large-scale asset purchase programmes.
With forward guidance, therefore, communication has shifted from being the medium by which monetary policy decisions are
explained to the public, to being a monetary policy instrument in itself. This makes trust, credibility, and effectiveness even more
important.
During the crisis and its aftermath, the use of communication as a powerful crisis management tool was seen even beyond the
usual boundaries of forward guidance.
In 2012, the European sovereign debt crisis was at its peak. Government bond yields of more vulnerable countries of the euro
were soaring, and investors doubted that national and European institutions could join forces in time to avert the collapse of the
euro area. In July of that year, the then-ECB President Mario Draghi spoke about the economic conjuncture and the policy
response, making the historic remark: "The ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be
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enough" (Draghi 2012).
Those words were so effective that the programme to purchase sovereign bonds of more vulnerable countries announced shortly
afterward (the outright monetary transactions, OMT) was never required. Draghi's earlier assurance succeeded in removing
market expectations of a collapse of the euro area and redenomination risks, so compressing sovereign bond spreads (Altavilla et
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al 2016).
As this episode shows, monetary policy has been able to transform itself over recent years. Effective use of new tools, including
communication, enabled central banks to deliver nancial and monetary conditions supportive of real economic activity in a time
of unprecedented challenges.
Despite these successes, there is still a lot to do.
People appear to be developing a growing sense of frustration towards their central bank, particularly in the euro area. Some are
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frustrated because, in their view, monetary policy is failing to deliver its objective (Coeuré 2019). Others do not understand
concerns about low ination but are worried about the risk of side effects due to the use of non-standard policy instruments
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(Schnabel 2020). And there are others who are perhaps, not surprisingly, just confused.
In my view, this means that we central banks need to do a better job at communicating and explaining.
A number of elements characterising the current environment contribute to ination rates remaining below target, in spite of
exceptional monetary accommodation. These elements include, for instance, the decline in the natural rate of interest, the
increased frequency of episodes where policy rates are constrained by the effective lower bound, weak investment dynamics
reecting a heightened unpredictability of macroeconomic outcomes due to global trade disputes and economic policy
uncertainty, a slower-than-expected transmission of labour market tightness to wage increases, and of wage increases to price
ination.
In the context of the strategy review, a question we should be asking ourselves is what changes to the conduct of monetary policy
could help us achieve our objectives? Indeed, do we need to further clarify the objectives themselves?
The Governing Council has, since 2003, interpreted its price stability mandate as ination of 'close to, but below, 2 per cent'. This
has led to speculation that the ECB might be more concerned about deviations above 2 per cent than deviations below 2 per cent
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(Paloviita 2018). In its Introductory Statement last July, the Governing Council said that it was "determined to act, in line with its
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commitment to symmetry in the ination aim" (Draghi 2019). Nonetheless, it seems that there continues to be uncertainty
about exactly what 'close to, but below' means. Overall, it is perhaps understandable that the public, and even markets, may be
confused as to what our ination aim is.
Having a target that everyone understands and believes in is ultimately a question of communication. Various options for the
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interpretation of price stability will be considered in the review (Largarde 2019). It has been argued that since central banks are
unlikely to hit a point target on a regular basis, having one makes it harder to explain policy to the public and that a range, with or
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without a focal point, may be more realistic and therefore provide the central bank with more credibility (Financial Times 2020).
The current situation also sets central banks an unusual challenge. For most of recent central banking history, our focus has been
on communicating why we should avoid high ination. It seems that across developed economies, central banks have won this
argument, although it was painful to bring ination expectations down in the wake of the high ination experienced in many
economies in the 1970s and 1980s.
Today, the task is to explain why low ination and deation are also something central banks want to avoid. This is a new challenge.
Raising ination expectations which have fallen below target will pose different challenges than reducing ination expectations
did in the past, although it may prove equally, if not more, difcult to achieve in light of the constraints posed by the effective lower
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bound (Eggertsson 2003).
Now, more than ever, effective communication is needed. We have to avoid target shortfalls leading to a de-anchoring in ination
expectations from the central bank's aim. However, we must bear in mind that, while the ability to gain trust and shape
expectations through public statements is one of the most powerful tools the central bank has, the cost of sending the wrong
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message can also be high (Bernanke 2015).
Designing effective monetary policy communication for the future
These considerations bring us to an important question, namely how to design effective monetary policy communication?
We could discuss at length various renements to current monetary policy communications. For example, should the accounts
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continue to be anonymised? Indeed, should we publish a voting record from Governing Council meetings? (Visco 2019). Should
the Eurosystem consider publishing an equivalent to the Federal Open Market Committee (FOMC) dot plots?
In many ways, these renements would be aimed at smoothing communication with nancial markets and informed observers.
However, what I would like to focus on here today is our communication and interaction with the wider public. I have been struck
since joining the Governing Council that most of the measures of ination expectations, particularly long term ination
expectations, are market-based, or surveys of professional forecasters. In contrast, what the public expects is much less well
understood.
One measure of public perceptions is the dataset maintained by the European Commission, which shows that households believed
that ination in the euro area was approximately 9 per cent on average in the period between 2004 and 2018, when it was, in fact,
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1.6 per cent (Coeuré 2019, Arioli 2017). Such misconceptions regarding macro and monetary phenomena are not limited to the
euro area. The Bank of England's Ination Attitudes Survey estimates that public knowledge about monetary policy in the UK has
remained low and at over the past 17 years, despite the increase in communication by the central bank (Haldane et al
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2020). Similar results have been found in the United States (Binder 2017).
This points to a large gap between perception and reality. Central banks must take responsibility for this gap: if the public does not
understand what we are trying to achieve and whether we are succeeding, it is incumbent upon us to explain ourselves better.
One issue here is that, with the exception of formal surveys such as those I just mentioned, central banks have traditionally seen
communication with the public as a one-way street, rather than a dialogue. In my view, central banks must listen to what the public
has to say, and how their experiences are inuencing their perception of monetary policy.
For instance, most central banks target a specic price index, an index that is supposedly representative of the average consumer.
But I am reminded of the story of the 'average' pilot.
Around the time of the Second World War, US Air Force planes were designed to t the average size pilot: the size of the seat,
distance to hand controls, reach to pedals, were all determined by the population average height, chest circumference, arm-length,
leg-length etc. However, the high rate of accidents during pilot training raised questions. Was it the pilots? Or perhaps the training
methods? Only when the data was checked, was it realised that the cockpits were at fault: no pilot met all the average
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measurements. There was no 'average' person (Rose 2016).
Similarly, people at different stages of life often have different consumption baskets. It might be that the basket of goods is
different for some groups of people, or it might be that the weight within the basket is different. For instance, young families will
often spend a very large proportion of their income on childcare. Older people perhaps spend more on various types of insurance
and healthcare. While almost 70 per cent of the population are homeowners, the remainder of the population who are in the
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private rental market might spend well over a third of their income on rent. And the factors affecting ination change over time.
For example in Ireland, while external factors remain the most important determinants of Irish ination, domestic factors have
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become increasingly important in recent years (Byrne and Zakipour-Saber 2020). Over the last ve years, the average annual
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increase in rents has been over 7 per cent in Ireland (CSO). It would hardly be surprising therefore if renters believe ination is
higher than our consumer price indices show.
The question we have to consider is whether the current consumer price index is helping to communicate the central bank's
objectives in the most effective way, even though it may be a perfectly reasonable tool for policymakers and informed observers.
Recognising that we are operating in a world where not everyone is 'average' - and there are a wide distribution of experiences - is
a challenge for central banks. This is why the ECB's 'listening events' which will take place in every euro area country as part of the
review, are important. At these, we can learn insights on the operation of the economy for different groups of people, and also how
we can communicate better with them.
More generally, when communicating with the public, we need to consider at least two different issues. The rst relates to the
challenge of obtaining the public's attention and the second relates to the risk of sending the wrong message or being
misunderstood.
Perhaps most of all we need to be aware of the context in which our messages are being received, of the narratives they are
playing into, or even the narratives they are creating. Robert Shiller has pointed out the impact that narratives can have on
macroeconomic outcomes and "how popular stories change through time to affect economic outcomes, including not only
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recessions and depressions, but also other important economic phenomena" (Shiller 2019).
Looking at whether the narratives about the ECB's monetary policy are indeed based on reality or ction, as my colleague Isabel
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Schnabel did so eloquently recently, is therefore essential (Schnabel 2020).
A central bank's communication is inevitably placed in the context of existing narratives. For example, a constant narrative in the
media of rising house prices is likely to inuence the public's perception of ination, whether or not a household is directly
impacted.
We have moved from the world of "mumbling incoherence" to an era of rapid information overload. Narratives are now created
quickly and change rapidly. Moreover, where there is no narrative, the vacuum is quickly lled, not necessarily with accurate facts.
So another question that we should consider is whether our communications is keeping up with the pace of rapidly changing
narratives? Do we spend enough time considering the narrative into which our communication is being placed, or indeed the
narrative we want to create?
Some may argue that a rather straightforward solution to the problem of limited understanding by the public may be to speak
more often. However, research has shown that the language of most publications and communications provided by the US Federal
Reserve and the Bank of England have a level of technicality that makes them inaccessible to 90 per cent or more of the general
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public (Haldane 2017). Providing communication that is more accessible in terms of both content and channel, would certainly
allow central banks to reach a broader audience. Further insights from behavioural economics on how we can enhance public
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comprehension and trust would also be welcome (Bholat 2019).
This, however, brings us to the second issue, the risk of sending the wrong message. Using a over-simplied communication carries
the risk that the public will develop a false sense of certainty about the central bank objectives and its views on policy and the
economy more generally.
Providing a thorough assessment of the status of the economy, as well as reliable forecasts about future outcomes, has always
been complex. If households observe that the reality does not exactly match a simplied message conveyed by the central bank,
public trust in central banking could actually decrease. In these circumstances, engaging with a broader audience could cause
more harm than good.
At the end of the day it is the quality and effectiveness of communications that matters.
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This important point is highlighted in recent research published by the Bank of England (Haldane et al 2020). The authors argue
that, if central banks want to reach the people currently by-passed by their communication and build higher and durable levels of
trust, complementary activities are needed in addition to simplied communication. The authors summarise these activities as
Explanation, Engagement and Education, the 3 Es of central bank communication. In short, better education makes explanation
easier, and increases the effectiveness of engagement.
Explanation, engagement and education are essential to help the public understand why the ECB prioritises price stability over
other, perhaps more tangible, economic objectives, why a positive rate of ination, of say 2 per cent, is better than zero ination,
why people's perception of ination can be so different from the price index. They are necessary, in short, to help people
understand and appreciate what central banks do and why they do it. This should allow monetary policy to be trusted by the public
and central banks to be able to guide the formation of expectations and to deliver effective policymaking.
But successfully explaining to, engaging with and educating the public is far more than just a matter of removing jargon from our
communication. Central banks should rst ask themselves: is our monetary policy framework sufciently consistent, and are we
open and transparent enough to allow for such engagement and understanding?
Conclusion. The Eurosystem: The progress made, the remaining challenges, and the strategy review
So nally, what about the Eurosystem? The review of the monetary policy strategy, is an opportunity to reect on our
communication strategy. At its foundation, the ECB's communication strategy was less transparent and open to the public than
today. For example, accounts of the meetings were not released, staff forecasts were not published and the price stability
denition needed clarication.
Since then, we have seen a higher degree of transparency of both the strategy and the decision-making process of the ECB. Staff
economic forecasts have been published since December 2000, the two-pillar framework and the price stability denition was
amended during the 2003 strategy review, and accounts of the meetings have been released since January 2015 (Rostagno et al
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2019, Hartmann and Smets 2018). Although these have been important improvements, there is more to be considered in our
review.
I began this speech by asking a number of questions. All of them are important to our understanding of monetary policy and some
are within the direct control of the central bank, while others are not. In preparing this speech, I nd myself asking one nal
question: are we thinking creatively enough about how to solve the challenges we face and are we including enough different
perspectives - is there enough diversity - in our analysis? Are we to paraphrase John Maynard Keynes, 'escaping from the old
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ideas' (Keynes 1936). I have outlined some of my thinking on how better communication can enhance central bank credibility,
effectiveness and trust. I am looking forward to our discussion and the discussions to come.
The review of our monetary policy strategy constitutes an important milestone. The ultimate goal must be - as remarked by
President Lagarde recently - to bring the ECB and the Eurosystem as close as possible to all European citizens, the people we
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ultimately serve (Lagarde 2020).
Once we have done that, we will know that the age of 'mumbling incoherence' is well and truly over.
[1] I would like to thank Giuseppe Corbisiero and Rebecca Stuart for their contribution to my remarks.
[2] See Lucas, R. (1972), " Expectations and the neutrality of money ," Journal of Economic Theory, 4, 103-124; Lucas, R. (1973), " Some
international evidence on output-ination tradeoffs ," American Economic Review, 63, 326-334; and Lucas, R. (1976), " Econometric
policy evaluation: A critique ," Journal of Monetary Economics, supplement, 19-46.
[3] Kydland, F. and E. Prescott (1977), " Rules rather than discretion: The inconsistency of optimal plans ," Journal of Political
Economy, 85, 473-490.
[4] See e.g. Blinder, A., M. Ehrmann, M. Fratzscher, J. De Haan, and D. Jansen (2008), " Central Bank Communication and Monetary
Policy: A Survey of Theory and Evidence ," Journal of Economic Literature, 46(4): 910-945.
[5] Blinder, A.S., Goodhart, C., Wyplosz, C., Hildebrand, P. and Lipton, D., 2001. How do central banks talk?. Centre for Economic
Policy Research. P66
[6] Blinder, A. (1998), Central Banking in Theory and Practice , The MIT Press; originally delivered as the 1996 Robbins Lectures at
the London School of Economics.
[7] Woodford, M. (2001), " Monetary Policy in the Information Economy ," In Economic Policy for the Information Economy, Federal
Reserve Bank of Kansas City, 297-370.
[8] Skingsley, C. (2019), " How to open up a central bank - and why stay open ," speech given at the Annual Research Conference of
the National Bank of Ukraine, 23 May 2019.
[9] Bernanke, B. (2015), " Inaugurating a New Blog ," The Brookings Institution, March 30, 2015.
[10] Draghi, M. (2012), Speech at the Global Investment Conference in London , 26 July 2012.
[11] The reduction in bond yields due to the OMT announcement was moreover associated with a signicant increase in real
activity, credit, and prices in Italy and Spain. See Altavilla, C., D. Giannone and M. Lenza (2016), " The Financial and Macroeconomic
Effects of the OMT Announcements ," International Journal of Central Banking, 12(3): 29-57.
[12] Coeuré, B. (2019), " Monetary policy: lifting the veil of effectiveness ," speech at the ECB colloquium on "Monetary policy: the
challenges ahead," 18 December 2019.
[13] See Schnabel, I. (2020) " Narratives about the ECB's monetary policy - reality or ction? ", remarks at the Juristische
Studiengesellschaft, Karlsruhe, 11 February 2020
[14] See e.g. Paloviita, M., M. Haavio, P. Jalasjoki, and J. Kilponen (2018), " What does "below, but close to, two per cent" mean?
Assessing the ECB's reaction function with real time data ," Working Paper.
[15] See Draghi, M. (2019). Introductory Statement and Q&A, Press Conference , 25 July 2019.
[16] Lagarde, C. (2019). Q&A at the Committee on Economic and Monetary Affairs , 2 December 2019.
[17] FT editorial (2020). " ECB must make ination targeting t for purpose ", 23 January 2020.
[18] See Eggertsson, G. and Woodford, M. (2003), " The zero bound on interest rates and optimal monetary policy ", Brookings
Papers on Economic Activity, No. 1, 139-211.
[19] See e.g. Bernanke, B. (2015), " Inaugurating a New Blog ," The Brookings Institution, March 30, 2015.
[20] Visco, I (2019), " The euro-area economy and the recent monetary policy decisions ", speech at Giornate di economia "Marcello
De Cecco", Lanciano (Italy), 28 September 2019.
[21] See Coeuré, B. (2019) " Ination expectations and the conduct of monetary policy ", speech at the SAFE Policy Center on 11
July 2019; and Arioli, Bates, Dieden, Duca, Friz, Gayer, Kenny, Meyler, and Pavlova (2017), " EU consumers' quantitative ination
perceptions and expectations: an evaluation ," ECB Occasional Paper n. 186.
[22] See Haldane, A., A. Macaulay and M. McMahon (2020), " The 3 E's of central bank communication with the public ," Bank of
England, Staff Working Paper No. 847, p. 6.
[23] See e.g. Binder, C. (2017), " Fed Speak on Main Street: Central Bank Communication and Household Expectations ", Journal of
Macroeconomics, Vol. 52, pp. 238-251.
[24] Rose, T., (2016), " When U.S. Air Force discovered the aw of averages ", The Toronto Star, January 16.
[25] Some people who are not homeowners rent social housing, rather than renting in the private sector.
[26] See Byrne, Stephen, and Zakipour-Saber, Shayan (2020), 'Evaluating the determinants of Irish ination', Central Bank of
Ireland, Economic Letter, Vol. 2020, No.1.
[27] Central Statistics Ofce. Percentage Change over 12 months of 'Private rent' sub index of the Consumer Price Index .
[28] See Shiller, Robert J. (2019, pxii), Narrative Economics', Princeton University Press: Oxford.
[29] Schnabel, I. (2020) " Narratives about the ECB's monetary policy - reality or ction? ", remarks at the Juristische
Studiengesellschaft, Karlsruhe, 11 February 2020
[30] See pp. 16-17 Haldane, A. (2017), " A little more conversation. A little less action ," speech at the Macroeconomics and
Monetary Policy Conference, San Francisco Fed, 31 March 2017.
[31] See for example, David Bholat, Nida Broughton, Alice Parker, Janna Ter Meer and Eryk Walczak, Enhancing central bank
communications using simple and relatable information, Journal of Monetary Economics Volume 108 , December 2019, Pages 1-15.
[32] Haldane, A., A. Macaulay and M. McMahon (2020), " The 3 E's of central bank communication with the public ," Bank of
England, Staff Working Paper No. 847, p. 6.
[33] For details on the evolution of the ECB monetary policy strategy and action, see Rostagno, Altavilla, Carboni, Lemke, Motto,
Saint Guilhem, and Yiangou (2019), " A tale of two decades: the ECB's monetary policy at 20 ," ECB Working Paper no. 2346; and
Hartmann and Smets (2018), " The rst twenty years of the European Central Bank: monetary policy ," ECB Working Paper no.
2219.
[34] See Keynes, J.M. (1936), The General Theory of Employment, Interest and Money. London: Macmillan. The preface notes "the
difculty lies, not in the new ideas, but in escaping the old ones".
[35] Lagarde, C. (2020), Hearing at the Committee on Economic and Monetary Affairs of the European Parliament , Brussels, 6
February 2020.
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