From Anti-Growth Bias to Quantitative Easing: The ECB’s Belated Conversion?

Abstract

This paper investigates the European Central Bank’s (ECB) monetary policies. It identifies an anti-growth bias in the ECB’s monetary policy approach: the ECB is quick to hike, but slow to ease. Similarly, while other players and institutional deficiencies share responsibility for the euro’s failure, the bank has generally done “too little, too late” with regard to managing the euro crisis, preventing protracted stagnation, and containing deflation threats. The bank remains attached to the euro area’s official competitive wage repression strategy which is in conflict with the ECB’s price stability mandate and undermines the bank’s more recent unconventional monetary policy initiatives designed to restore price stability. The ECB needs a “Euro Treasury” partner to overcome the euro regime’s most serious flaw: the divorce between central bank and treasury institutions.

Citation

Bibow, J. (2017), "From Anti-Growth Bias to Quantitative Easing: The ECB’s Belated Conversion?", Economic Imbalances and Institutional Changes to the Euro and the European Union (International Finance Review, Vol. 18), Emerald Publishing Limited, Leeds, pp. 115-141. https://doi.org/10.1108/S1569-376720170000018007