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Complexity, Uncertainty, and Monetary Policy: Can the ECB Avoid the Unconventional Becoming the ‘New Normal’?

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  • Hartwell Christopher A.

    (Bournemouth University, Poole, United Kingdom of Great Britain and Northern Ireland)

Abstract

Worries about Italy and the unresolved issue of euro governance – coupled with uncertainty surrounding Brexit – means that the European Central Bank (ECB) may already be facing its next crisis in the euro area. Unfortunately, the ECB is still fighting the last war, deploying the tools of unconventional monetary policy to address lingering problems while unable institutionally to address needed structural change. This paper looks at the ECB as an institution amongst institutions and shows how even more unconventional approaches will not help to bolster the economy of the euro area. Indeed, given the complexity of money, the effects of expectations, and continued uncertainty, expanding the ECB’s unconventional arsenal is likely to have deleterious consequences across Europe.

Suggested Citation

  • Hartwell Christopher A., 2019. "Complexity, Uncertainty, and Monetary Policy: Can the ECB Avoid the Unconventional Becoming the ‘New Normal’?," The Economists' Voice, De Gruyter, vol. 16(1), pages 1-13, December.
    • Handle: RePEc:bpj:evoice:v:16:y:2019:i:1:p:13:n:8
    DOI: 10.1515/ev-2019-0021
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    More about this item

    Keywords

    complexity; euro; European Central Bank; monetary policy;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F15 - International Economics - - Trade - - - Economic Integration
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions

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