’ italia staff ( which do not consider further possible non - linear effects ) show that in the absence of the measures adopted between june 2014 and december 2015, both annual inflation and gdp growth in the euro area would be lower by about half a percentage point in 2015 – 17. the expansion of economic activity in 2015 would have been slightly below 1 percent, against an observed 1. 6 percent ; inflation would have been negative, at about – 0. 5 percent, against 0. 0. these estimates are consistent with those of the eurosystem and the ecb staff. in italy, the effects are estimated to be even stronger. from a medium - term perspective, the financial stability implications of a low interest rate environment require a deeper assessment of the fundamental forces shaping real interest rates. in the current debate there are varying views. according to the “ debt super - cycle ” view, interest rates, growth and inflation are low because of the legacy of the financial crisis ; in the medium term they will go back to “ normal ”. according to the today fashionable “ secular stagnation ” hypothesis, advanced economies suffer from a persistent imbalance resulting from an increasing propensity to save and a decreasing propensity to invest ; excessive savings act as a hindrance to growth and inflation, and pull down real interest rates. a number of supply and demand factors, all characterised by a high degree of persistence, have been considered to justify this imbalance. demographic developments, high demand for safe assets in emerging economies, increases in wealth and income inequality and a permanent decrease in total factor productivity are the main examples. if we accept, instead, the view of those who suggest that we are in a transition towards the “ second machine age ”, low interest rates may be seen as the result of an adjustment temporarily characterised by weak demand and high unemployment ; in the longer run, productivity gains due to the ongoing digital revolution and many other current and foreseen technological innovations will increase economic growth and raise real interest rates, even if with uncertain consequences for the distribution of incomes. it is not easy to assess which of these views is more likely to be confirmed by the future evolution, but none of them can be totally dismissed a priori ; future developments could result in a combination of these different hypotheses. all this considered, it is conceivable that real interest rates will go up in future years, but how far in the future this will occur is very difficult to assess. since a scenario in

in the most favorable scenario a rebalancing of global demand will take time : macroeconomic imbalances and the associated large capital flows across major economic areas will continue for some time. they must be financed in an orderly manner. the reform of the global financial system remains essential to be able to rely on a more solid and efficient financial sector than we had in the past. fourth, while the credibility of the wto rule - based system has survived the recent global recession, current agreements still leave too many domestic markets ( particularly in services ) effectively insulated from the beneficial pressures of foreign competition. it must be avoided that the delay of a successful conclusion of the current round of multilateral trade liberalization – the doha round – leaves a hole that would be probably filled in by less efficient and less equitable bilateral trade agreements. concluding, i do not think there is an explicit currency war, but the risk of diverging and uncoordinated national policies, focused exclusively on an internal dimension and short term objectives, is becoming more worrying. we must make our policies more global, more aware of the need of taking into account the impact they have on each other. the international community has shown to be able to work together to avoid a collapse of the global economy. now it has to prove that it is able to do the same even at a time when the emergency is behind us, but we are still confronting very serious challenges. bis central bankers ’ speeches