Monetary policy risks becoming ineffective in a world where growth is sluggish, economies are deeply interconnected and interest rates are already near zero, a top European Central Bank policy maker said on Saturday.
Speaking at the University of California Berkeley, ECB executive board member Benoit Coeure called for academics and policy makers to address issues at the root of a global economic malaise, singling out the euro zone's inability to revive domestic demand.
"The capacity of the global economy to generate growth is under question," Coeure said in remarks prepared for a speech.
"In a global zero lower bound environment, surplus countries hold world output down."
"If we ignore those issues, there is a risk that monetary policies may become ineffective, overburdened, and/or collectively trapped in a suboptimal equilibrium."