Opening panel remarks by Christine Lagarde, President of the ECB, at the annual Economic Policy Symposium “The policy implications of labour market transition” organised by the Federal Reserve Bank of Kansas City in Jackson Hole

Jackson Hole, 23 August 2025

Alexis de Tocqueville – one of the keenest observers of early American democracy – once wrote: “History is a gallery of pictures in which there are few originals and many copies.”

In monetary policy, too, we often look to past cycles for guidance, expecting familiar patterns to repeat themselves. But this cycle has proven to be original in striking ways.

Major central banks have undertaken the most aggressive tightening in a generation. At the outset, there were understandable concerns about how such a rapid and substantial adjustment would affect labour markets.

Historically, disinflation has come at a cost. Since the 1960s, the “sacrifice ratio” has typically been around 1.^[1] In practice, this means that…