policy measures adopted between june 2014 and december 2015, both annual inflation and gdp growth in the euro area would have been lower by about half a percentage point in 2015 – 17. the expansion of economic activity in 2015 would have been slightly below 1 per cent, against an observed 1. 6 per cent ; inflation would have been negative, at about – 0. 5 per cent, against 0. 0. 5 these estimates are consistent with those of the eurosystem and the ecb staff. 6 regarding italy, the effects are estimated to be somewhat stronger : absent the monetary impulse, the italian recession would have ended only in 2017 ; inflation would have remained negative for the whole three - year period. 7 13. the commitment to pursuing the objective of price stability shown by the governing council has been essential for stemming the de - anchoring of expectations and maintaining the ecb credibility, which is crucial to avoiding the risk of a deflationary spiral. when inflation remains far from target for a prolonged period, the risk of deanchoring may be compounded by economic agents revising their expectations for future inflation to take account of surprises registered in the past, to an extent that also depends on the share of agents that lose their trust in the central bank ’ s objective. 8 14. in order to bring inflation back to target, it is essential to support aggregate demand. the unconventional measures adopted by the governing council of the ecb are contributing to increased spending on consumption and investment goods. and i am confident that the effects we have observed so far will be strengthened by the new decisions we took on 10 march : the strengthening of the app and the inclusion of corporate bonds, together with the introduction of new targeted refinancing operations, will contribute to a further decline of the cost of borrowing in the private sector. 15. a recent debate has centred on the notion of “ helicopter money ”. obviously this is a “ very unconventional ” policy, targeted at directly affecting consumption and investment by households and firms. such an extreme measure would undoubtedly be subject to operational and legal constraints ; the redistributive implications and the close ties with fiscal policy would all make it very complex, all the more so in the euro area given its institutional framework. as recently noted by president draghi, and reiterated by benoit cœure and peter praet, helicopter money is not currently part of the discussion in the governing council, although no policy tool within our mandate can or should be dismissed a priori. 16

, might significantly overestimate inflation. 6. let me also add that we should pay attention to the interactions among these ( and other ) conditions. a very relevant aspect is that too low inflation for too long makes it more difficult to deal with public and private debt. related to this, as shown by recent research, the interaction of falling inflation and nominal interest rates at the zlb with nominal debt and downward nominal rigidities can lead even favourable transitory supply shocks ( such as a reduction of the price of oil ) to have negative effects on economic activity. 2 “ the outcome of the ecb ’ s evaluation of its monetary policy strategy ”, ecb monthly bulletin, june 2003. neri, s. and a notarpietro, “ the macroeconomic effects of low and falling inflation at the zero lower bound ”, banca d ’ italia, temi di discussione ( working papers ), no. 1040, 2015. bis central bankers ’ speeches why does inflation remain low? do global forces dominate, and is monetary policy still effective? 7. low inflation certainly has a global dimension. it reflects developments in oil prices ; deflationary pressures coming from the chinese economy ; possibly technological change. but it also reflects domestic developments that should not be underestimated. domestic factors operate both via expectations and via economic activity, and in both respects conditions in the euro area differ from those in other main advanced economies. 8. although declining inflation expectations has been a global phenomenon, since the end of 2014 the risk of a de - anchoring has increased particularly in the euro area, where expectations have reached lower levels than in other advanced economies. 3 a measure of this risk can be inferred from the probability that large changes in short - term expectations will be passed on to long - term expectations. 4 this indicator climbed from october 2014 until mid - january 2015 in the euro area, while no increases were recorded in the u. s. or the u. k. over the same period ( figure 1 ). after the extension of the app to include public sector securities the indicator decreased sharply, but remained volatile and above the historical average. 9. let me also point out, in this respect, that the importance of expectations of low inflation in determining wage outcomes, and thus giving rise to second - round effects, may be increasing. in italy, in some recently signed collective contracts it was agreed that parts of future pay rises will be revised downwards in the event that the inflation rate