Publication

In the aftermath of the financial crisis of 2007–2008, policymakers became concerned about a potential long-term effect of the crisis on the wider economy. In this context, this policy paper discusses the consequence of changes in potential growth for monetary policy performance and design. The discussion focuses on how the nature of the so-called Phillips curve, which is the hallmark of monetary policy, is linked to changes in potential growth and what this means for designing monetary policy.