Euro area productivity growth has been slowing since the turn of the millennium. Economic policy that bolsters stability in the economy is a vital factor for productivity growth.

Slower-than-target inflation and a persistent decline in inflation expectations are key challenges for monetary policy. A negative equilibrium of prolonged low inflation and zero interest rates would fundamentally weaken monetary policy’s room for manoeuvre in balancing fluctuations in the economic cycle.

The Bank of Finland organized an international research conference to discuss two key topics in particular: the challenges of monetary policy and the future of European Monetary Union.

Finland’s economic growth will be slower during the next three years. Growth has also slowed in the euro area and elsewhere around the world. However, there are still possibilities for growth in the Finnish economy.

The economic outlook for the euro area has deteriorated rapidly. The impact of Brexit on Europe as a whole is hard to predict. Another factor overshadowing the global economy is the trade dispute between the USA and China.

A review of the ECB’s monetary policy strategy is due in light of the latest economic research and the changed operating environment.

Price stability has been pursued with different monetary policy strategies. A successful strategy increases the effectiveness of monetary policy.

The euro area’s monetary policy stance is conducive to economic growth and employment in Finland.