Isabel Schnabel: Reconciling the macro and micro evidence on the effects of monetary policy

Welcome address by Ms Isabel Schnabel, Member of the Executive Board of the European Central Bank, at the seventh ECB Annual Research Conference, Frankfurt am Main, 12 September 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Introduction

I would like to welcome you all very warmly to the seventh ECB Annual Research Conference.

After two years of holding this conference virtually, we are very happy to see many of you in person – thank you so much for coming to Frankfurt.

An equally warm welcome to those of you who can only join us online.

Thanks to Luc and his team, we have an exciting programme with high-quality research papers on important topics.

One set of presentations will help us to better understand business cycle dynamics and the effects of monetary policy. The focus will be on price rigidities in microeconomic data, the role of temporary layoffs for unemployment dynamics, the effect of macroeconomic uncertainty on household spending decisions and the potential crowding out of bank lending by quantitative easing policies. We will also hear about a new econometric methodology for constructing monetary policy counterfactuals. Another group of presentations will cover structural changes in the economy, in particular the data economy and automation, and what they imply for the functioning of our economy and monetary policy.

The two highlights of the conference will be the Jean Monnet Lecture by Jean Tirole and the debate about the outlook for inflation in the euro area, as seen from the outside, with Paul Krugman and Lawrence Summers, moderated by Beatrice Weder di Mauro.

In my remarks today, I will discuss how recent research, including that presented here, helps us to understand the transmission of our monetary policy.