First, mounting an appropriate monetary response is easier when you have a single central bank. Under the gold standard, it still would have been possible for central banks to reflate their depressed economies had they moved together.

By contrast, were the ECB to adopt decisive measures, it could reflate the entire eurozone and obviate the need for countries to act unilaterally. But, while the ECB has the capacity, the question remains whether it is has the will.

One problem with the word bubble is that it creates a mental picture of an expanding soap bubble, which is destined to pop suddenly and irrevocably. But speculative bubbles are not so easily ended indeed, they may deflate somewhat, as the story changes, and then reflate.

The ECB s stated goal is to reflate the eurozone, thereby reducing the euro s external value, by purchasing more than 1.1 trillion worth of assets. According to ECB President Mario Draghi, the inflation rate, which currently stands at just below 0 , is to be raised to an average of just below 2 .

A more recent indication that inflation targeting has not caused the disinflation seen since the 1990s is the unsuccessful effort by a growing number of central banks to reflate their economies. If central banks are unable to increase inflation, it stands to reason that they may not have been instrumental in reducing it.

Until last year, policymakers could always produce a new rabbit from their hat to reflate asset prices and trigger economic recovery. Fiscal stimulus, near zero interest rates, two rounds of quantitative easing, ring fencing of bad debt, and trillions of dollars in bailouts and liquidity provision for banks and financial institutions officials tried them all.

In his first weeks in office, he announced a 10.3 trillion ( 116 billion) stimulus bill and appointed Haruhiko Kuroda, a determined, dynamic, and bold thinker, to head the Bank of Japan. Kuroda wasted little time in initiating expansionary monetary policies following in the footsteps of the US Federal Reserve and the Bank of England to help reflate the economy.