why the management of the ECB is highly questionable

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CHRONIC. On several points, the monetary policy conducted by the ECB since December 2021 is lacking. At the risk of damaging its image and credibility.

By Patrick Artus*

The ECB has often been completely wrong in its inflation forecasts for Europe.
© DANIEL ROLAND / AFP

Published on 02/04/2023 at 10:00 a.m.

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Lhe management of monetary policy in the euro zone by the ECB since 2021 is extremely open to criticism, even to the point of undermining its credibility: the European Central Bank has denied the lasting nature of inflation, disrupted financial market expectations, reacted very late, changed strategy, ignored basic principles of macroeconomic analysis, etc.

Here we will look into and explore three of these criticisms in more depth.

The ECB was unable to forecast inflation and its duration

The first point on which the ECB’s monetary policy management can certainly be criticized is its lasting inability to forecast inflation. We had to wait for the forecasts made by the ECB in December 2022 to see a certain number of changes in these forecasts…