ECB Chief Economist Philip Lane on How to Get Europe Growing Again

There's a pretty widespread recognition that the EU is facing a bunch of economic challenges right now. Growth has been slowing and, as in many places, there's been post-pandemic inflation. But there are other issues too, including a sense that Europe is falling behind when it comes to key technologies like AI and semiconductors. There's also an ongoing energy crisis and the recent threat of tariffs from the US. So how is the European Central Bank evaluating and responding to these cyclical and structural challenges? How do one-off risks affect the direction of monetary policy? We speak with Philip Lane, chief economist at the ECB, about how the central bank is thinking about all these things. This transcript has been lightly edited for clarity.

Key insights from the pod:
Potential US tariffs and monetary policy — 3:18
How Philip Lane characterizes the EU economy right now — 6:57
Should the ECB be cutting in this environment? — 9:35
The usefulness of the neutral rate — 11:03
The relationship between inflation and unemployment — 15:01
The transmission or lower rates — 18:14
Cyclical vs structural challenges — 23:20
Multi-lateralism and competitiveness in the EU — 27:50
What can monetary policy do about one-off shocks? — 33:14
Climate policy and central banks — 35:01
Competition within AI — 40:07