IDEAS home Printed from https://ideas.repec.org/h/spr/fimchp/978-3-319-45710-9_13.html
   My bibliography  Save this book chapter

The Crisis Management of the ECB

In: The Euro and the Crisis

Author

Listed:
  • Fritz Breuss

    (WU Vienna University of Economics and Business and Austrian Institute of Economic Research)

Abstract

A succession of crises—the global financial and economic crisis (GFC) in 2008, the Great Recession of 2009 and the following Euro crisis—forced the economic policy to action. After the fiscal policy has used up its ammunition in the fight against the effects of the 2009 recession, monetary policy remained the only expansive player in the political arena. The European Central Bank (ECB) responded—like the other major central banks in the world—first with a zero interest rate policy, then by “quantitative easing”. However, the ECB acted in comparison with the Fed with some delay. In the evaluation of the crisis management of the ECB must clearly state that it has missed its own inflation target of 2 %. However, it has been successful in reducing the high government bond yields after the famous “Whatever it takes” speech by ECB President Draghi in July 2012 and the subsequent announcement of the OMT (outright monetary transactions) programme. Whether the quantitative easing program by the ECB in the years 2015/2017 with a view to achieving the primary objective, namely an inflation rate of 2 % will be successful is an open question. Simulations with the Global Economic Model of Oxford Economics indicate that the quantitative easing policy will achieve the inflation target but with a great delay. The impact on the real economy will not be as large as QE experiments in the USA. Other unintended effects—such as the formation of bubbles on the stock markets—are greater than the intended effects.

Suggested Citation

  • Fritz Breuss, 2017. "The Crisis Management of the ECB," Financial and Monetary Policy Studies, in: Nazaré da Costa Cabral & José Renato Gonçalves & Nuno Cunha Rodrigues (ed.), The Euro and the Crisis, pages 199-221, Springer.
  • Handle: RePEc:spr:fimchp:978-3-319-45710-9_13
    DOI: 10.1007/978-3-319-45710-9_13
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christian Beer & Christian Alexander Belabed & Andreas Breitenfellner & Christian Ragacs & Beat Weber, 2017. "EU integration and its impact on Austria," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q1/2017, pages 1-38.
    2. Christian Beer & Christian Alexander Belabed & Andreas Breitenfellner & Christian Ragacs & Beat Weber, 2017. "Österreich und die europäische Integration," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 86-126.

    More about this item

    Keywords

    European integration; Monetary policy; Quantitative easing; Model simulations;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F15 - International Economics - - Trade - - - Economic Integration
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:fimchp:978-3-319-45710-9_13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.