. further progress in global economic integration should not be taken for granted, however. geopolitical concerns, including international tensions and the risks of terrorism, already constrain the pace of worldwide economic integration and may do so even more in the future. and, as in the past, the social and political opposition to openness can be strong. although this opposition has many sources, i have suggested that much of it arises because changes in the patterns of production are likely to threaten the livelihoods of some workers and the profits of some firms, even when these changes lead to greater productivity and output overall. the natural reaction of those so affected is to resist change, for example, by seeking the passage of protectionist measures. the challenge for policymakers is to ensure that the benefits of global economic integration are sufficiently widely shared - for example, by helping displaced workers get the necessary training to take advantage of new opportunities - that a consensus for welfare - enhancing change can be obtained. building such a consensus may be far from easy, at both the national and the global levels. however, the effort is well worth making, as the potential benefits of increased global economic integration are large indeed. references bloom, nick, raffaella sadun, and john van reenen ( 2006 ). " it ain't what you do it's the way that you do i. t. - investigating the productivity miracle using the overseas activities of u. s. multinationals, " unpublished paper, centre for economic performance, march. bordo, michael, barry eichengreen, and douglas irwin ( 1999 ). " is globalization today really different than globalization a hundred years ago? " nber working paper no. 7195, june. some of the key empirical papers in this literature are doms and jensen ( 1998 ) ; criscuolo and martin ( 2005 ) ; corrado, lengermann, and slifman ( 2005 ) ; bloom, sadun, and van reenen ( 2006 ), and kurz ( 2006 ). see, for example, bordo, eichengreen, and irwin ( 1999 ). corrado, carol, paul lengermann, and larry slifman ( 2005 ). " the contribution of mncs to u. s. productivity growth, 1977 - 2000, " unpublished paper, board of governors of the federal reserve system, july. criscuolo, chiara, and ralf martin ( 2005 ). "

to the aforementioned “ no bailout clause ”. without forceful action, the singleness of our monetary policy and the effectiveness of the transmission mechanism would have been put at risk. third, the measures we have taken are temporary, targeted and proportionate in nature. we have disenfranchised ourselves from the previously self - imposed constraints so that these measures can address the uncertainty of the evolving crisis. they are also designed in such a way that they should preserve market functioning and price formation mechanisms. pepp – a flexible instrument to fight the crisis within our mandate i would now like to take a closer look at the legality of our most far - reaching and exceptional monetary policy decision, the launch of the pepp. let me first look at its features. the pepp was established to act first as a backstop to potential market disruption. in short, it 1 / 5 bis central bankers'speeches has had a stabilising effect to counteract the market fragmentation that was unwarranted on the basis of the underlying economic fundamentals, and to safeguard the transmission mechanism. the pepp also reinforces the ecb ’ s monetary policy stance. in so doing, the pepp is a direct and targeted response to an “ extraordinary and acute economic crisis ” 1 and aims to ensure the ecb ’ s ability to fulfil its mandate under the circumstances. notably however, “ due to these exceptional, fast - evolving … circumstances, the pepp requires a high degree of flexibility in its design and implementation ” as set out in the decision implementing the pepp. 2 purchases under the pepp continue to be guided by the capital key of the national central banks as for the app. but the pepp allows for fluctuations in the distribution of purchases over time, across asset classes and among jurisdictions. this flexibility has allowed us to effectively stave off risks to the smooth transmission of monetary policy. in view of the pandemic ’ s exceptional nature, we decided not to apply to the pepp the same selfimposed public purchase limits that apply to the sovereign purchases under the app. but, we will conduct purchases only to the extent this is necessary and proportionate to fulfil our mandate. in short, the pepp is a targeted, proportionate and temporary measure in response to the crisis triggered by the covid - 19 pandemic. the legality of the pepp is ensured for three reasons : first, and as i mentioned earlier, the pepp falls within