European Central Bank and Monetary Policy in the Euro Area

2018 ◽  
pp. 3975-3989
Author(s):  
Vítor Gaspar ◽  
Otmar Issing
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Euro Area ◽  
European Central Bank ◽  
European Central

scholarly journals Complexity, Uncertainty, and Monetary Policy: Can the ECB Avoid the Unconventional Becoming the ‘New Normal’?

2019 ◽  
Vol 16 (1) ◽  
Author(s):  
Christopher A. Hartwell
Keyword(s):  
Monetary Policy ◽  
Structural Change ◽  
Central Bank ◽  
Euro Area ◽  
European Central Bank ◽  
Unresolved Issue ◽  
Unconventional Monetary Policy ◽  
New Normal ◽  
European Central

Abstract Worries about Italy and the unresolved issue of euro governance – coupled with uncertainty surrounding Brexit – means that the European Central Bank (ECB) may already be facing its next crisis in the euro area. Unfortunately, the ECB is still fighting the last war, deploying the tools of unconventional monetary policy to address lingering problems while unable institutionally to address needed structural change. This paper looks at the ECB as an institution amongst institutions and shows how even more unconventional approaches will not help to bolster the economy of the euro area. Indeed, given the complexity of money, the effects of expectations, and continued uncertainty, expanding the ECB’s unconventional arsenal is likely to have deleterious consequences across Europe.

scholarly journals Monetary Policy and Euro Area Governance in the EMU

2018 ◽  
Author(s):  
Herwig C H Hofmann
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Monetary Union ◽  
Euro Area ◽  
European Central Bank ◽  
Central Banks ◽  
Single Currency ◽  
Diverse Range ◽  
European Central ◽  
The Eu

One of the European Union’s most ambitious policy projects to date is the ‘economic and monetary union whose currency is the euro’ (EMU, Article 3(4) TEU). The EMU’s two polices—the economic union and the monetary union—are an unequal set of twins. On one hand, the monetary union’s central elements are well developed: as an element of substance, the introduction of the euro as a single currency; as an institutional achievement, the creation of the European System of Central Banks (ESCB) together with the European Central Bank (ECB) on the EU level as a highly independent body having the power to adopt a diverse range of measures. Additionally, the Treaties contain specific provisions on the goals and principles of monetary policy.

scholarly journals The efficiency of monetary policy instruments of the European Central Bank in liquidity regulating in euro area

Equilibrium ◽  
2010 ◽  
Vol 5 (2) ◽  
pp. 195-208
Author(s):  
Ilona Pietryka
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Euro Area ◽  
European Central Bank ◽  
Banking System ◽  
Policy Instruments ◽  
Central Banks ◽  
European Central

Mechanism of forming of liquidity level of national central banks participating in ESCB is clear. It is based on centralized and decentralized operations. The ECB decides on the direction of monetary policy, and the national central banks implement monetary policy taking into account those guidelines as well as the conditions of their country. The aim of the paper is to estimate the efficiency of the EBC monetary policy in regulating the liquidity of the banking system in euro area. The aim was achieved by characterizing the organizational and balance relationship banks of the Eurosystem because of this regulation. Special accent was placed on monetary policy instruments, which are created by national central banks and they form liquidity of the euro area.

scholarly journals Determinanty normalizacji polityki monetarnej Europejskiego Banku Centralnego

2017 ◽  
pp. 175-188
Author(s):  
Irena Pyka ◽  
Aleksandra Nocoń
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
Euro Area ◽  
European Central Bank ◽  
Balance Sheet ◽  
Open Market ◽  
Effect Analysis ◽  
European Central ◽  
Exit Strategies

Due to the implementation of non-standard monetary policy by the European Central Bank, concentrated in the first part of the financial crisis mainly on the unconventional open market operations, and in the second on the Quantitative Easing policy, the exit strategies and monetary policy normalization have become the subject of intensified discussion. The concept of a return to "normal" monetary policy of the ECB will require the implementation of two aspects: raising of interest rates and reduction of the size of central bank balance sheet. However, it is undisputed that the exit strategies of the ECB could be implemented only after completing of the asset purchase program and stabilization of euro area public finances. It seems that at this moment the monetary policy of Eurozone will have to wait. The main aim of the study is to identify the determinants of the monetary policy normalization of the European Central Bank. Particular attention will be paid to the conditions of normalization relating to the support for creation of economic recovery in the euro area, the increase of inflation towards the inflation target, stimulation of dynamics of lending activity and the situation on the financial market. The following research methods will be used: the literature studies, including domestic and foreign literature, case studies, cause and effect analysis, observation analysis as well as synthesis analysis. 

Twenty Years of European Central Bank Monetary Policy: A Keynesian and Austrian Perspective

2019 ◽  
Vol 239 (5-6) ◽  
pp. 797-840 ◽  
Author(s):  
Ad van Riet
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
Euro Area ◽  
European Central Bank ◽  
Aggregate Demand ◽  
Point Of View ◽  
Financial Policy ◽  
European Central ◽  
Long Time

Abstract This article reviews how the European Central Bank (ECB) implemented its monetary policy for the euro area from 1999 to 2018 from two perspectives. Taking a Keynesian point of view, the euro area economy was beset for a long time by secular stagnation and required the ECB to ensure a protracted period of relatively low interest rates to provide continuous support to aggregate demand at the level of the Economic and Monetary Union (EMU). By contrast, the Austrian School of Economics argues that the low-interest rate bias of the ECB caused financial excesses and prevented a more rapid reallocation of unviable resources necessary for a sustainable expansion of aggregate supply. Both the Keynesian and the Austrian paradigm appear relevant when examining the monetary and financial aspects of the euro area business cycle and the secular decline of interest rates over the past 20 years. For most of the time, ECB monetary policy was the ‘only game in town’ and the EMU architecture was unable to deliver the balanced macroeconomic and financial policy mix required for a sustainable path of the euro area economy.

The ECB’s quantitative easing programme as a constitutional game changer

2019 ◽  
Vol 26 (1) ◽  
pp. 94-107
Author(s):  
Klaus Tuori
Keyword(s):  
Monetary Policy ◽  
Public Sector ◽  
Central Bank ◽  
Euro Area ◽  
European Central Bank ◽  
Central Banking ◽  
Quantitative Easing ◽  
Member States ◽  
The Public ◽  
European Central

The European Central Bank started its quantitative easing programme in 2015 in order to support euro area financial conditions and ultimately increase inflation. The controversial Public Sector Purchase programme has resulted in central bank purchases of government bonds in the magnitude of €2.1 trillion and the Eurosystem (the European Central Bank and the national central banks) become the largest creditor to the euro area Member States. The constitutional framework of the European Central Bank did foresee such a programme, which also makes it potentially problematic for the European Central Bank’s accountability. The underlying source for constitutional concerns is the European Central Bank’s exceptional independence, which could be justified with a narrow central banking model, but becomes problematic when the European Central Bank’s influence on the society becomes more multifaceted, which blurs the borderlines between monetary policy and other economic policies. The specific constitutional concerns related to the Public Sector Purchase programme and accountability are highlighted by three claims: (a) With the Public Sector Purchase programme, the European Central Bank takes deeper inroads to the society than with traditional monetary policy; (b) Through the Public Sector Purchase programme, the European Central Bank became the largest creditor to Member States it was not allowed to finance; and (c) The Public Sector Purchase programme can lead to conflicts between the price stability objective and financial stability.

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