The paper analyses the monetary policy responses of the European Central Bank
(ECB) to the global financial crisis and the European sovereign debt crisis.
Our goals are on the one hand to explain chronologically the main measures in
conventional and unconventional policies adopted by the ECB and on the other
hand to analyse their effects on key interest rates, monetary aggregates and
the money multiplier. The assessment is that the ECB?s monetary policy
responses to the crisis have been ?too little, too late?, constrained by the
institutional framework, which prevents the ECB from acting as a true central
bank with the role of lender of last resort.
Monetary Policy in the Open Economy Revisited: Price Setting and Exchange-Rate Flexibility