##ccioni et al. ( 2021 ), the ecb ( european central bank ) ’ s price stability framework : past experience, and current and future challenges [ https : / / www. ecb. europa. eu / pub / pdf / scpops / ecb. op269 ~ 3f2619ac7a. en. pdf? 217b41c0e8888c1e237932190d594ff9 ], occasional paper series 269, european central bank. 2. for a comprehensive analysis, see european commission ( 2023 ), european economic forecast [ https : / / economy - finance. ec. europa. eu / system / files / 2023 - 05 / ip200 _ en _ 1. pdf ], institutional paper 200, may 2023, pp. 29 - 31 and hansen et al. ( 2023 ), euro area inflation after the pandemic and energy shock : import prices, profits and wages [ https : / / papers. ssrn. com / sol3 / delivery. cfm / wpi2023131. pdf? abstractid = 4493911 & mirid = 1 ], imf ( international monetary fund ) working paper no 2023 / 131. 3. see weber and wasner ( 2022 ), sellers ’ inflation, profits and conflict : why can large firms hike prices in an emergency?, review of keynesian economics, vol. 11 ( 2 ), pp. 183 - 213. in the popular debate, this phenomenon has also been dubbed “ greedflation ”. for a critical account of this debate, see the economist ( 2023 ), “ greedflation ” is a nonsense idea [ https : / / www. economist. com / leaders / 2023 / 07 / 06 / greedflation - is - a - nonsense - idea ], 6 july 2023. 4. bilbiie and kanzig ( 2023 ) show, with a range of new keynesian models, that the “ greed narrative ” seems incompatible with workhorse macroeconomic theories. see bilbiie and kanzig ( 2023 ), greed? profits, inflation, and aggregate demand [ https : / / www. nber. org / system / files / working _ papers / w31618 / w31618. pdf ], nber ( national bureau of economic research ) working paper no 31618, september

homepage [ / en ] press [ / en / press ] speeches [ / en / press / speeches ] maintaining price stability – the role of the eurosystem and other economic agents speech at the european economic and financial centre 08. 11. 2023 | london | joachim nagel check against delivery. 1 introduction 2 a challenging monetary policy world 3 the eurosystem ’ s response to the surge in inflation 4 the role of other economic agents in maintaining price stability 4. 1 firms 4. 2 workers 4. 3 governments 5 monetary policy conclusions 1 introduction ambassador berger, thank you very much for your kind introduction and for hosting this event here at the german embassy. a particular welcome also to the further ambassadors present today. professor scobie, thank you very much for inviting me. i look forward to hearing your comments later. ladies and gentlemen, it is a great honour for me to speak to you here today. the european economic and financial centre ’ s distinguished speakers seminar provides an enriching forum for discussing matters of monetary policy. today, i would like to address the following question : who is responsible for maintaining price stability in the euro area? in my view, the answer to this question is quite simple and clear : the eurosystem! that is, the european central bank and the 20 national central banks in the euro area. does that mean that the actions of other economic agents are irrelevant? absolutely not. other economic agents can make the eurosystem ’ s life easier, but also more difficult. ultimately, however, responsibility for price stability lies in the hands of the eurosystem. at this point, you might be wondering : if the answer to my question is that simple, why don ’ t we just proceed to lunch? quite obviously, the devil is in the details and the full answer more complicated and nuanced. allow me to explain my reasoning in more detail, starting from the macroeconomic environment. 2 a challenging monetary policy world if we think back to just a few years ago, inflation was too low. in a simple narrative, that was because of a variety of favourable supply shocks and rather weak aggregate demand. the too - low inflation called for expansionary monetary policy. by easing financing conditions, monetary policy makes spending more attractive, thus boosting aggregate demand. higher aggregate demand stimulates the economy and ultimately causes inflation to rise. there was no trade - off between stabilising inflation around its target and output growth around its potential. during the course of