Speech by Philip R. Lane, Member of the Executive Board of the ECB, at the Bank of Finland’s International Monetary Policy Conference

Helsinki, 26 June 2024

Introduction

My aim today is to discuss the modern role of monetary analysis at the ECB.^[1] I will first review how monetary analysis has advanced over the twenty-five year history of the euro. Second, I will discuss how monetary analysis contributed to the assessment of financing conditions during the pandemic. Third, I will explain how monetary analysis has informed the diagnosis of the post-pandemic surges in inflation. Fourth, I will examine the contributions of monetary analysis to the calibration of the tightening cycle. Finally, I will speculate on the future role of monetary analysis.

The evolving role of monetary analysis

The initial monetary policy strategy of the ECB was based on a two-pillar framework to identify risks to price stability: economic analysis and monetary analysis. The two analytical domains essentially…