Current and Future ECB Monetary Policy

Philip Arestis

Working papers from Financialisation, Economy, Society & Sustainable Development (FESSUD) Project

Abstract: This paper examines the operations of the European Central Bank (ECB) with respect to monetary policy, along with its effects on inflation, exchange rate and financial stability. It also discusses how the regulatory role of the ECB should be improved in the future. In this way, the paper discusses the involvement of the ECB in regulatory policy towards the financial sector, and the responses of the ECB to the financial crisis, instability and banks’ illiquidity and insolvency, as well as to sovereign insolvency. It begins with the current set up of the European Monetary Union (EMU) along with the theoretical principles of the EMU model, and the extent to which it conforms with the theoretical framework of the New Consensus Macroeconomics and its policy implications, namely inflation targeting. Problems with the current EMU arrangements are then discussed, followed by changes in view of the August 2007 financial crisis and the ‘great recession’. Required ECB changes, and of course changes in monetary policies are discussed before we finally summarize and conclude.

Keywords: European Central Bank; Monetary Policy; European Monetary Union; Current and Future Developments. (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2014-03-06
New Economics Papers: this item is included in nep-eec, nep-mac and nep-mon
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Citations: View citations in EconPapers (2)

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