Navigating energy shocks: risks and policy responses
· Christine Lagarde, President of the European Central Bank (Euro area (EU))
Summary written by Dark Majestic in its own words · topics: inflation and price stability, climate, energy and nature
CL · Christine Lagarde Wiki · European Central Bank WikiNavigating energy shocks: risks and policy responsesContextKeynote speech by Christine Lagarde at "The ECB and Its Watchers" conference at Goethe University Frankfurt.
Why it mattersGiven at 'The ECB and Its Watchers', a key forum for ECB communication, this speech sets out how the ECB reads the energy shock.
Problems raised- An energy shock hit a growing euro area economy.
- Large price shocks can have outsized effects on inflation.
- Demand pressures can amplify supply shocks.
Solutions proposed- Work with scenarios and watch early warning signs.
- Learn from past energy shocks.
- Act if the shock embeds in broader inflation.
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