philip r lane : q & a with reuters q & a with mr philip r lane, member of the executive board of the european central bank, conducted by mr daniel burns, at reuters newsmaker, new york city, 27 september 2019. * * * the following is a transcript of an on stage question and answer. let me welcome philip lane, member of the executive board of the ecb. that ’ s a role he went to earlier this year having served as the governor of the central bank of ireland since 2015. he has been an adviser to other international economic organisations, such as the imf, oecd, world bank and asian development bank. he has a phd in economics from harvard and earned his bafrom trinity college dublin where, until recently, he was the whately professor of political economy. i ’ m also told he is a liverpool fan, so he is riding high early in this premier league season and we ’ ll see if that confidence extends to team ecb. mr lane if you ’ d like to start. one reason i suppose that i wanted to talk here this morning was to further explain the context for our recent monetary policy decision. so if you look back over the last few years, if you look at the period from 2014 to 2018, essentially, the decision in 2014 by the ecb to tackle the risks of a slow - growing economy and the deflation risk in the euro area meant that during those years, from 2014 to 2018, what we saw was a fairly significant recovery. we had a big decline in unemployment in europe, a very strong record of job creation and a significant stabilisation of inflation. so compared with the period in 2014, when deflation risk was on the horizon, there was a significant recovery in the inflation process through that period. and so to more recent monetary policy history, at the end of 2018 the decision was made that enough progress had been made in bringing inflation back towards the target that we would end the net asset purchases. now in september 2019, part of the package that we announced a couple of weeks ago was : we did a small policy rate cut – the deposit facility rate went from – 40 basis points to – 50 basis points, we provided reinforced forward guidance and we restarted the net asset purchase programme ( app ), running at €20 billion a month. so you may ask : why was that necessary? well, when we made the decision last december to end net purchases under our app, the 2021

most helpful in building an economy in which people are poised to get ahead. conversely, it would also be beneficial to understand whether any policies may hold people back or discourage upward mobility. there is some debate on how the level of economic mobility in the united states may have changed in recent decades and whether it is easier or more difficult for people to get ahead today than it was in previous generations. shortly, you will hear from a panel of distinguished experts with a range of views on this topic. looking at the very recent past, we should also be asking whether and how this may have changed coming out of the great recession. later, my federal reserve board colleague, governor brainard, will speak on a topic of significant interest to me and i expect to many others – how young adults are faring in the economy and what the short - and long - term implications may have been for entering the job market at a time of significantly constrained opportunities. this is another example of how exogenous factors – those over which individuals have little or no control – may play an important role in determining how easily someone is able to improve his or her circumstances. communities also affect economic mobility, and here, too, more research is needed to understand how and to what extent these effects occur. economists do not fully understand how locational differences affect economic mobility or the complex relationship between economic mobility and geographic mobility. there are community characteristics – for instance, the composition and level of local employment, schools, transportation, physical infrastructure, and community facilities – that may affect the economic mobility of the residents of that community. and there is also a community development analogue to economic mobility : further research may help us better understand why some communities succeed or fail in generating jobs, developing successful small businesses, attracting infrastructure investment, and so on. how do some places advance economically and create circumstances in which residents, in turn, are more likely to thrive? finally, there are important research questions to be answered about the relationship between economic mobility and the economy as a whole. it seems obvious that greater economic opportunity and mobility promotes a healthier economy. entrepreneurship, innovation, and hard work – surely key contributors to individual mobility – are central to a strong economy as well. but research could help us better understand how much mobility at the individual level matters for overall growth in productivity and economic output. to what extent is income mobility influenced by domestic or global economic forces, and to what extent can we promote mobility through domestic policy choices? bis central bankers ’ speeches these