and here the ecb will continue to take all necessary steps within our mandate of price stability – for all euro area citizens in all parts of the euro area. already our policies have dispelled tail risks in financial markets that could have led to selfreinforcing vicious circles. we are now orienting our measures to ensure that the right financial conditions are in place to support a recovery from the crisis. this was the motivation behind our recent decision to expand our pandemic emergency purchase programme to €1. 35 trillion, coupled with the up to €3 trillion we are making available to banks that lend to the real economy. but monetary policy cannot address the more profound questions about how the economy will look in the future. historical experience suggests that major economic shifts like the one we are going through today require government action to foster change and smooth the transition to the new normal. in particular, governments need to foster innovation by providing the right framework to encourage experimentation and risk - taking in new and growing sectors, and to support the transition to new jobs for people working in “ sunset ” sectors. in parallel, they need to ensure that the conditions are in place to direct investment towards the technologies and sectors of the future. 2 / 4 bis central bankers'speeches this requires sufficient financing. the european commission estimates that the investment needs for delivering the digital transformation as well as the green transition will be at least €1. 2 trillion over the next two years. 2 but in a number of countries – italy among them – mobilising investment requires above all a business - friendly economic environment, with efficient and agile public and private services, adequate physical and digital infrastructures, a well - functioning judicial system and a strong financial sector. if such actions are taken, this crisis can engender a period of positive transformation. it offers an opportunity to policymakers to take a decisive step forward towards more inclusive, greener and more digital growth. a renewed focus on the digital economy, for example, can help break the negative feedback loop we see in europe between fragmented markets, low economies of scale and weak investment in digital capacities, which has at times resulted in the knowledge economy in the euro area contributing only about half as much to productivity growth as in the united states. 3 greater digitalisation would in turn help accelerate the shift in europe towards what the economist carlota perez has termed “ smart green growth ”, which is not only about renewables and sustainable goods, but also about innovation in the productivity of resources

would otherwise be the case if confronted with a similar macroeconomic outlook under more normal market conditions. given the uncertainty surrounding the appropriate monetary policy stance under such circumstances, it could consider to err on the side of caution by trying to avoid feeding the bubble with an overly accommodative policy. these issues, which have been extensively discussed, deserve further analysis and consideration. v. the implications of globalisation for monetary policy and the global responsibilities of central banks my final remarks relate to the last, very challenging and open question raised by alan on the global responsibilities of the main central banks. this is an important question that cannot be answered in a simple, straightforward manner and in a limited period of time. and alan does not provide an answer, either. i would like to pose, however, a set of related questions on the implications of globalisation for monetary policy. in a globalised economy, should the role and orientation of monetary policy be changed? should the framework for analysis and policy formulation be amended? is the required analysis for setting policy becoming more demanding? the direct and brief answers i recently gave to these questions are : no, no and yes to some extent. it is sometimes argued that the monetary policy of a major central bank should help guide the domestic economy ’ s adjustment to the evolving global economic environment and the competitive pressures associated with globalisation ; and that it should foster the adjustment of global imbalances and even assume responsibility for the smooth functioning of the global economy. in my opinion, globalisation does not affect the central role and overriding responsibility of central banks to preserve price stability “ at home ”. on the contrary, maintaining price stability in a rapidly evolving, globalised economy that may influence the dynamics of inflation in various ways becomes more essential and challenging, particularly in situations where adverse inflation shocks or inflationary pressures in some economies are now more easily transmitted to others. consequently, if the primary objectives of monetary policy are unaffected by globalisation, the appropriate strategic framework for analysis and policy formulation should remain the same. however, the analysis required for policy formulation will have to carefully take into account the various effects of globalisation on the dynamics of inflation, economic growth and asset prices. for example : in the a globalised economy, traditional measures of core inflation are even more difficult to interpret and use as indicators of underlying domestic inflationary pressures ; the estimates of potential output are more difficult to calculate in a robust manner ; and the measurement and usefulness of output gaps are subject to greater