Slides accompanying the speech
The past year illustrates quite well how political decisions in large countries can have consequences for the entire global economy. The tariffs imposed by the US administration at the beginning of 2025 seem to have been handled relatively well by the global economy − as does the uncertainty and various twists and turns surrounding them. The economic impact of the war in Iran, the prolonged disruption of key global supply chains and the continued political tensions in the region may prove to be more significant. More broadly, it is also possible that the 'Pax Americana' − the world order that has provided relative stability and predictability since the Second World War − is now coming to an end. In such a world, it is likely that the global economy will be subject to more and larger disturbances or shocks, i.e. rapid and unexpected developments. These disruptions will inevitably have economic consequences.
How should monetary policymakers act when the economy is hit by shocks, and how should they view the current situation? These are the issues around which my discussion will centre. At the same time, I would like to make it clear that some of the arguments I will present are my own reflections and assessments and are not necessarily shared by my colleagues on the Executive Board.
