Refocusing the ECB on Output Stabilization and Growth through Inflation Targeting?

Jörg Bibow

Economics Working Paper Archive from Levy Economics Institute

Abstract: Challenging the conventional wisdom that structural problems are to blame for the euro area's protracted domestic demand stagnation, this paper sets out to shed some fresh light on the role of the ECB in the ongoing EMU crisis. Contrary to the widely held interpretation of the ECB as an inflation targeter and a rather soft one, too -- it is argued that the key characteristic of the ECB is the pronounced asymmetry in its policy approach and mindset. Curiously, this asymmetry has not only given rise to an antigrowth bias, but to upward price pressures and distortions as well. There is a link between stagnation and inflation persistence that owes to the ECB's failure to internalize the euro area's fiscal regime. This raises the question as to whether inflation targeting would have led to better results, or could do so in future.

Date: 2005-07
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.levyinstitute.org/pubs/wp_425.pdf (application/pdf)

Related works:
Working Paper: Refocusing the ECB on Output Stabilization and Growth through Inflation Targeting? (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lev:wrkpap:wp_425

Access Statistics for this paper

More papers in Economics Working Paper Archive from Levy Economics Institute
Bibliographic data for series maintained by Elizabeth Dunn ( this e-mail address is bad, please contact ).