##cancies per unemployed person on average, despite the weak economic setting. before 2015, this number mostly fluctuated between 0. 2 and 0. 5. moreover, according to our projections, from 2026 onwards, the potential labour force will decrease on average by 80 thousand persons every year. this development may lead to persistently higher wage growth, and, as a by - product, stronger domestic inflation. with geopolitical uncertainties, production off - shoring may no longer be as easy a solution as before. third, take the need to decarbonise our economies. climate change has already caused significant damage – record temperatures and the images of floods and droughts are in all our minds. carbon prices should reflect the true costs of carbon 2 / 4 bis - central bankers'speeches emissions so as to incentivise a rapid and complete decarbonisation process. decarbonisation implies a far - reaching restructuring of the economy. over a transition period, it may contribute to inflationary pressures. however, there is conflicting evidence about the economic effects of decarbonisation – not least due to dynamic and general equilibrium effects of carbon prices and other climate policies that may counteract the initial inflationary impact. for example, on the one hand, according to the imf, decarbonising the generation of electricity will lead to additional 0. 1 to 0. 4 pp of inflation per year globally – if countries do not further delay a credible transition. 5 on the other hand, colleagues at the bundesbank's research centre have shown that shocks to transition risk may have dampened price increases so far. 6 all in all, we do not know how strongly these structural factors will affect prices and whether or not the pre - pandemic price dynamics will show up again on the horizon. i am thus very glad that this conference is taking a close look at structural changes and the implications on inflation. 4 possible implications for monetary policy but what implications could such developments have for monetary policy? one thing is clear : our mandate is price stability! perhaps the interplay of structural drivers of inflation that i have just outlined will lead to some sort of sweet spot for monetary policy – with inflation at about 2 % and the level of interest rates not too high but at a safe distance from the effective lower bound. but if there is more price pressure in the medium - term, we must take action against it. at first glance, it may seem as if tighter monetary policy and

, we have seen prices of digital consumer goods fall significantly. digitalisation may sometimes also contribute to price transparency, which, by diminishing firms'local market power, could affect inflation indirectly. the effect of demographic trends on inflation is less obvious. if the dominant effect were greater willingness to save for retirement, one channel would go through a decline in the natural rate of interest, implying that monetary policy could turn out tighter than intended – leading to lower inflation. 3 possible post - pandemic inflation factors the period of missing inflation came to an abrupt end in 2021, when the pandemic began to lose its grip. the surge in energy prices, supply chain distortions induced by containment measures as well as supply bottlenecks due to strong consumer goods demand all fuelled the return of inflation, in a way never seen since the start of the monetary union. the russian attack on ukraine amplified this return, especially owing to a further drastic rise in energy prices. central banks around the globe had to act decisively to curb high inflation. in the euro area, the ecb governing council increased interest rates ten times in a row, a pace of tightening unseen since the start of the euro. since late 2022, the wave of inflation has been receding. energy price dynamics even reached negative territory, supply - chain strain eased, and core inflation has started to decline. in the euro area, inflation is expected to return to values of around 2 %. this is evidence of the success of the eurosystem's tight monetary policy. but looking ahead, do we need to prepare for a return to the world of too low inflation we were used to in the last decade? i am not convinced – for at least three reasons. first, take geopolitical uncertainties. we have just learned the hard way that costefficient global production chains and trade patterns may come to a sudden halt. of course, it makes no sense to fully abandon the advantages of international division of labour altogether. however, to improve resilience, some form of de - risking seems reasonable, especially in the case of strategically important goods. 4 we should keep in mind that greater security for supply chains is likely to come with some additional price pressures. second, take demographics. previously, many focused on the effect of demographics on propensity to save. now, a shortage of labour is becoming more and more visible in developed countries. for example, in germany, there are currently 1. 2 va