By Laurie Laird
LONDON (MaceNews) – The European Central Bank can pursue higher euro zone employment within the parameters of the Bank’s single mandate of achieving price stability, according to the ECB’s chief economist.
“The same factors needed to increase inflation will drive employment,” said ECB Chief Economist Philip Lane, in response to a question posed by Bank of Canada Deputy Governor Carolyn Wilkins on Tuesday. Wilkins served as moderator of an panel sponsored by the International Monetary Fund, also attended by Federal Reserve Vice Chair Richard Clarida.
Fellow ECB Governing Council member Isabel Schnabel raised the question of a reinterpretation of the ECB’s mandate earlier on Tuesday, suggesting a “more elastic” definition of the “medium-term” time frame required to return inflation to the Bank’s inflation target of close to but below 2%. The ECB has failed to meet that target for much of the last decade, with the eurozone’s Harmonised Index of Consumer Prices slipping into negative territory over the past three months.
ECB President Christine Lagarde has suggested that the HICP may not not accurately measure underlying price pressures and has raised the question of alternative measures to measuring inflation. The ECB is conducting a strategic review of its operations and has promised to announce a recalibration of monetary policy at its next meeting on 10 December.
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Contact this reporter: laurie@macenews.com.
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