From the euro’s creation to 2013, the ECB conducted a structurally more restrictive monetary policy than the Federal Reserve; since 2014, the opposite has been the case and is set to last: What consequences?

There was a real structural shift in the ECB’s monetary policy from 2014: prior to then, it was on average more restrictive than that of the Federal Reserve; since then, it has been more expansionary and looks set to remain so. This structural shift is due to both the ECB’s new strategy and the low level of structural inflation in the euro zone relative to the United States. What consequences are to be expected from monetary policy having become constantly more expansionary in the euro zone than in the United States? The euro should be weaker against the dollar; Valuations of financial and real estate assets in the euro zone should catch up with those in the United States.