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Schnabel: Monetary and financial stability – can they be separated?
Over the past years, we have seen a fundamental change in the macroeconomic environment. After years of low inflation and low interest rates, inflation has come back with a vengeance, reaching double-digit rates in some countries. After some initial hesitation, central banks around the world have responded forcefully to the inflationary threat, leading to a rapid and broadly synchronised tightening of monetary policy across advanced and emerging economies (Slide 2, left-hand side). In the euro area, too, the pace of rate hikes has been unprecedented (Slide 2, right-hand side). This rapid change has caught many by ... (full story)