Economics
Draghi's High-Class Problem Rears Its Head as ECB Views Exit
- Policy makers have been debating merits of a hot economy
- Key issue is whether the euro area is scarred or scratched
Capital Economics' McKeown Says Softness in Data Will Prevent ECB From Making Any Bold Moves
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European Central Bank officials are starting to consider a topic President Mario Draghi dismissed as a “high-class problem” -- whether to let the economy run hot.
Even with recent signs of a slowdown, the euro-zone economy is growing faster than its long-term trend. Allowing that boom to continue even at the cost of higher inflation is arguably one way to repair the damage from a decade of financial crises and a double-dip recession, for example by luring back workers who had given up hope of a job.