How did ECB get the 2 pillar strategy name?
I had posted about a speechfrom Otmar Issing where he explaisn why ECB did not choose inflation targeting regime. There were 2 main reasons- lack of a Euroarea Economic Model and inflation targeting does not focus on role of money in determining inflation. I came across another speech from Issing where he explains the rationale for ECB’s 2-pillar monetary policy strategy: Before I come back to these questions, let me be precise on history. To be frank, at first in our communication we did not exactly speak of a “two pillar approach”. (In internal discussions we had already used the term “pillar”. We had initially identified three pillars, the third one being the quantitative definition of price stability.) The public use of this term goes back to the press conference of 13 October 1998 in which the president communicated the adoption of “A stability-oriented monetary policy strategy for the ESCB” by the Governing Council. dual pillars of the strategy the monetary element and the inflat
