Inside Some of the Challenges the ECB Faces

The video discusses the economic impact of Brexit on the euro area, highlighting the challenges in measuring this impact. It explores the European Central Bank's (ECB) potential responses, such as increasing stimulus, and delves into the complexities of measuring the output gap. The discussion includes future economic projections and the ECB's possible actions in response to Brexit and other risks.

What is the initial estimated impact of Brexit on the euro area economy over three years?

• One percentage point

• Half a percentage point

• Two percentage points

• Quarter of a percentage point

Why is measuring the output gap in the euro area particularly challenging?

• Due to the lack of data

• Because it involves only one economy

• Because it consists of 19 different economies

• Due to consistent inflation rates

According to recent ECB research, how much slack might be left in the euro area economy?

• 3% of potential

• 6% of potential

• 12% of potential

• 9% of potential

What is one of the potential actions the ECB might consider in response to Brexit?

• Reducing bond purchases

• Increasing interest rates

• Implementing new taxes

• Tweaking bond-buying terms

What is a possible reason for the ECB to wait before taking action post-Brexit?

• To reduce operational costs

• To focus on other global issues

• To gather more data on the impact

• To avoid political backlash