What will happen in the euro zone if core inflation remains close to 1% for a long time?

Beyond transitional base effects, the ECB expects core inflation to remain barely above 1% until 2023. This estimate seems consistent with foreseeable trends in wages and productivity gains, particularly in a situation of under-employment. The foreseeable consequence is that the ECB will have to maintain a very expansionary monetary policy much longer than until March 2022, which is the date announced for the time being. There are then two messages: The ineffectiveness of the expansionary monetary policy in the euro zone in restoring inflation, due to the weak effects of monetary policy on demand for goods and services and the weak Phillips curve effects; Given this ineffectiveness, the need for a persistently very expansionary monetary policy as long as the inflation target remains unchanged, leading to the risk of massive asset price bubbles, unless the ECB stops its stubborn attempt to restore inflation.