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The ECB’s New Stealth Mandate

Over the course of the pandemic, the European Central Bank has effectively adopted a new mandate, perhaps having concluded that its inflation target is unattainable without more fiscal stimulus. The new top priority appears to be financial solidarity within the eurozone, and it could not have come at a better time.

STANFORD – The European Central Bank’s monetary policy has undergone a peculiar change during the pandemic. Something other than the goal of price stability appears to be guiding the bank’s overall approach, suggesting that it has adopted a new mandate without publicly announcing it.