Central Banks
ECB Can’t Simply ‘Look Through’ Supply Shocks, Elderson Says
- More frequent bottlenecks with risks of second-round effects
- Comments come amid a fresh review of the ECB’s strategy
Frank Elderson
Photographer: Alex Kraus/BloombergThis article is for subscribers only.
The European Central Bank can no longer afford to ignore supply shocks to the economy as they can leave a lasting imprint on inflation, Executive Board Member Frank Elderson said, adding they’re likely to emerge more often in the future.
“Monetary policy may have to respond more proactively to bottlenecks than has been considered appropriate in the past,” he said on Thursday in Nicosia, Cyprus, referring to potential damage to the economy’s productive capacity caused by geopolitical tensions, economic fragmentation, climate change and nature crises.