Sliding Down the Slippery Slope? Trends in the Rules and Country Allocations of the Eurosystemâ€™s PSPP and PEPP
Annika Havlik () and
Friedrich Heinemann ()
Additional contact information
Annika Havlik: ZEW Mannheim, L7, 1, 68161 Mannheim
Credit and Capital Markets, 2021, vol. 54, issue 2, 173-197
This study analyzes trends in the Eurosystemâ€™s rules and country allocations of the Public Sector Purchase Program (PSPP) and the Pandemic Emergency Purchase Program (PEPP). The synopsis of purchase rules reveals how the ECB Council has loosened the initially strict constraints over time and various dimensions. For the year 2020, the analysis shows that the divergences of net purchases from the ECB capital key are substantive. The analysis of the PSPP stocks since 2015 illustrates that this increasing divergence from the capital key was on its way already before the pandemic. A final step of the analysis puts the PSPP/PEPP net purchases in proportion to current fiscal indicators. These results prove that, for several euro countries, the central bank net purchases fully match even the exceptionally high borrowing requirements of 2020. The study concludes with reflections on the challenges for a program exit after the end of the pandemic.
Keywords: quantitative easing; ECB capital key; fiscal dominance; unconventional monetary policy (search for similar items in EconPapers)
JEL-codes: E42 H12 H63 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kuk:journl:v:54:y:2021:i:2:p:173-197
Access Statistics for this article
More articles in Credit and Capital Markets from Credit and Capital Markets
Bibliographic data for series maintained by Credit and Capital Markets ().