Wednesday April 18, 2.001. We view this position as unwise, if not arrogant. It would have been simply more reasonable to concede that there are some risks of a global recession, in our view. To the ECB's credit, its mission, as stated in the Maastricht Treaty, is to deliver domestic price stability and, once this mandatory target is achieved, to support growth and employment.
Monetary policy is assumed to affect economic nominal and real variables only progressively.
However, all this takes time to feed through nominal variables and eventually affect prices. As I see it, the risk embedded in an inappropriate macro analysis of the real economy today is to be wrong about price developments one or two years from now. From what I hear from large corporate clients and from our global economic team as well, global risks are still clearly on the downside. Asia is painfully discovering that focusing on the US market AND on technology is like sitting on a melting block of ice when US demand vanishes and a global tech slump unfolds. America has to come to terms with its internal imbalances, starting with the lack of domestic savings.