Learning from the European Central Bank's policy mistakes

In July 2022, by the time the European Central Bank (ECB) lifted
its deposit rate from negative to zero, headline inflation in the
euro area had reached 8.9%. Irrespective of the drivers of
inflation – a temporary supply shock or lasting demand shock – it
is shocking that a central bank with a price stability mandate
keeps its main interest rate negative while inflation accelerates
that much.


Something clearly went wrong. With the benefit of hindsight, it
is easy to say that the ECB made mistakes. But should the ECB
have acted differently, given the information available at the
time of its monetary policy meetings? 


In this episode of the Sound of Economics, Bruegel Director
Jeromin Zettelmeyer and Senior fellow Zsolt Darvas sit down to
discuss the ECB’s six lapses in tackling inflation, uncertainties
surrounding the euro area's economy and what could have been done
differently.