ECB Planting the Seeds of a Policy Pivot, Harvard's Sheard Says

The transcript discusses the European Central Bank's (ECB) current challenges in policy normalization, comparing it to other central banks like the Federal Reserve and the Bank of Japan. It highlights the limited tools available to counteract economic downturns and the broader need for a macroeconomic policy review. The discussion also touches on political factors, including Mario Draghi's term ending and the looming impact of Brexit, which poses a significant systemic risk to the EU and global economy. The transcript emphasizes the need for coordinated fiscal and monetary policies to address future economic challenges.

What role do fiscal policies play in conjunction with monetary policy according to the discussion?

In what ways might the ECB's ability to respond to economic downturns be limited?