ECB’s Draghi: Policy that has foundation in rigorous research is less prone to being impaired

The European Central Bank (ECB) President Mario Draghi is out on the wires now, via Reuters, deliver opening remarks on ‘The Interdependence of Research and Policymaking’ at the Lindau Meeting on Economic Sciences, in Germany.

Key Headlines:

Sudden shocks often make visible the flaws in our policy frameworks and challenge the explanatory power of existing theories in ways that have been previously overlooked.

But analysis conducted by researchers and embraced by policymakers remains essential in designing the policy response.

Policy that has foundation in rigorous research is less prone to being impaired

We must be aware of gaps that still remain in our knowledge

When the world changes as it did ten years ago, policies, especially monetary policy, need to be adjusted.

Responding to the Q & A session:

While forward guidance is a useful instrument recent research has highlighted that its effectiveness can be improved with other non-standard monetary policies