The implementation and the rationale of the new inflation target of the ECB

In July 2021, the ECB's target has been revised specifying that the threshold of 2% inflation rate has to be applied symmetrically and with a medium-term orientation. We argue that a symmetric inflation target can offer a strong contribution to anchoring inflation expectations and to limiting the risks due to the zero and effective lower bound constraints. The monetary policy strategy revision plays a key role in the policy mix between fiscal and monetary policies for the post pandemic recovery.