Draghi Says ECB Won't Accept Defeat on Inflation

The transcript discusses the implications of adjusting inflation expectations and targets. It highlights the credibility issues of raising inflation when targets are unmet and debates the suggestion to lower inflation targets. The impact of real interest rates on the economy is explained, emphasizing that lowering expected inflation raises real rates, leading to negative economic effects. The transcript concludes by affirming the link between inflation, expectations, and the economy.

What are the potential economic effects of raising real interest rates?

What does research indicate about the relationship between inflation, inflation expectations, and the state of the economy?