Draghi Says Research Confirms Central Banks Not Powerless

The transcript discusses how central banks should respond to crises when standard monetary policy tools, like short-term interest rates, reach their limits. It explores non-standard policies such as forward guidance and quantitative easing (QE), emphasizing the importance of financial frictions. Research shows that these unconventional measures can still support economic stability and inflation, as evidenced by actions taken by central banks in the Euro area and the United States.

In what ways can large scale asset purchases influence the economy?

Discuss the evolution of policy responses by central banks and governments during economic crises.