Rates cannot blunt trade coercion, Krugman tells ECB conference
Nobel laureate says EU’s fix for external shocks lies in industrial, not monetary, policy
Paul Krugman has argued that Europe should meet trade coercion with structural, technology-led industrial policy, not interest rate movements.
His comments, delivered in a Jean Monnet lecture at the European Central Bank’s annual research conference in Frankfurt on September 17, came after the ECB implemented its second rate hike of 2026 earlier this month. In a statement announcing the decision, the bank’s president Christine Lagarde said “the conflict in the Middle East” continued “to generate
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