VoxEU Webcast

The Eurozone Crisis and Currency Pegs

One of Stephanie Schmitt-Grohé's research areas is record-low interest rates and low inflation over a long period of time. While too high levels of inflation are undesirable, Schmitt-Grohé explains that moderate inflation is a sign of a healthy economy as it, in multiple dimensions, aids the growth of an economy. Unfortunately, though, many countries have been undershooting their inflation target for years, which may impact the public opinion on central banks’ ability to steer the economy.