Should the European Central Bank do more and go negative?

The European Central Bank is torn between those who say that it is already doing too much, mostly in Germany, and those who say it should do more. One of the actions the ECB should pursue, in the opinion of the latter group, is to bring the deposit rate into negative territory. 

Is the price stability target of the ECB at risk?

Get me right. I am not fearing, for the time being, that inflation will move above the 2.0 per cent ECB target. Of course, it would be wrong to assume that inflation is dead and can never come back and the central bank must be symmetrically alert to all deviations from price stability. Too high inflation is not, however, the risk against which to guard in the foreseeable future. The issue I want to explore here is whether there is a risk of inflation remaining too low for too long. This issue is germane to the risk of "Japanification", which has started to be discussed in the market.

…and what about the other side of the pond?

While on this side of the Atlantic the ECB was reacting more quickly than expected to the much weaker inflation prospects, I was in the US trying to better understand what is happening over there in the monetary area.

On the basis of the talks I had, I came back with a number of thoughts, which were not necessarily shared by my interlocutors but were stimulated by the discussions I had with them.