The situation will worsen with the current crisis, whereby it is vital to strengthen the role of policies aimed at increasing the employability of the more vulnerable workers and preventing unemployment from becoming structural. It is worth noting here that the sectors potentially most affected by this crisis (among which transport, hospitality, leisure and retail) account for almost 20% of employment in our country. But, moreover, these sectors evidence a greater concentration of less skilled workers who are less exposed to IT-, numeracy- and literacy-related tasks. That hampers the employability of these workers in other productive sectors that foreseeably have better growth prospects in the near future. Improving active labour market policies is also necessary over the medium-term horizon. Undoubtedly, technological advances (artificial intelligence, automation and robotics) will create new opportunities and will contribute to much-needed gains in productivity. But some workers will lose their jobs in this transition and will not always be in a position to instantly take advantage of new opportunities. Accordingly, active labour 10  market and training policies, duly re-designed to boost their effectiveness and efficiency, and with the appropriate funds behind them, are a natural lever for ensuring lifelong-learning for workers. This will enable them to acquire new skills, to hone them and to recycle themselves professionally in a changing and foreseeably very demanding environment in terms of technological skills. In sum, these and other reforms should contribute to increasing the economy’s growth potential.

As a consequence, the shocks can become entrenched in expectations. In such cases, firms and households become more attentive to past inflation outcomes and less attentive to the inflation norm or central bank inflation target when forming their expectations about future price developments. To the extent that these expectations enter wage and price-setting decisions in 3/5  BIS central bankers' speeches  the economy, low inflation may become self-reinforcing: observed disinflation translates into a downgrade of inflation expectations, which in turn feeds back into lasting disinflation. Evidence on the evolution of inflation expectations during the crisis indicates that this scenario was a concrete risk that the euro area was facing in mid-2014. For instance, staff estimates suggest that market-based longer-term inflation expectations became more than 1.5 times more sensitive to macroeconomic surprises than they had been in pre-crisis times. By contrast, if longer-term inflation expectations are well-anchored, they do not respond to shorter-term macroeconomic developments. Instead, they remain entirely determined by the inflation objective that the central bank has committed to attain. But, especially after the oil price shocks in the second half of 2014, most measures for the sensitivity of inflation expectations have edged up.6 The observation of a weaker anchoring of inflation expectations, in principle, is consistent with different interpretations. It might reflect doubts either with regard to the central bank’s commitment to pursue its objective, or with regard to the central bank’s ability to achieve its aim.