The Independent European Central Bank: Keynesian Alternatives

Philip Arestis

Macroeconomics from University Library of Munich, Germany

Abstract: In this paper, the author aims to question the assumptions underlying the economic case for the independent European Central Bank (ECB) and argues that although a European Clearing Agency (ECA) of the type Keynes envisaged for the international economy is not a panacea for the economic problems of the European Union (EU), it is, nonetheless, a better way forward and far superior to the ECB. The paper (1) outlines the theoretical basis of Keynesian monetary and financial theory; (2) aims to ascertain the extent to which credit availability is affected by the creation of an ECB and, on that basis, to offer a critical analysis of current proposals for an ECB; (3) looks closely at the case for the ECA, seen as performing a range of functions rather than having a remit defined simply in terms of strict monetary control, including a commitment to providing the necessary finance for full employment and a responsibility for ensuring that the burden of balance-of-payments adjustment falls upon both deficit and surplus countries.

JEL-codes: E (search for similar items in EconPapers)
Pages: 31 pages
Date: 1999-08-12
Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 31; figures: included
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: The Independent European Central Bank: Keynesian Alternatives (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:9908004

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