Michael Hüther in The ECB and Its Watchers Image
Quelle: Erk Fotolia

Do you think that additional nonstandard monetary policy measures are necessary in the current economic situation of the euro area? If so: Will the expanded asset purchase program work?

The ECB’s policy rate near the zero lower bound does not only constrain the conduct of monetary policy but it also endangers financial stability. The ECB’s large scale asset purchases are necessary for preventing deflationary dynamics; they are, however, no substitutes for structural reforms in the Eurozone economies.

How do the potential costs of the taken non-standard monetary policy measures (such as moral hazard problems for governments or increased risk-taking) compare to their (desired) benefits?

The risks arising from large scale asset purchases are real. Nevertheless, non-standard policy measures are unavoidable in the current situation. These risks can, however, be curtailed by governments sticking to their reform plans. The ECB’s possibilities to exit early from non-standard policy measures crucially depend on the fulfillment of their reform agenda.

What do you think are the largest challenges for monetary policy resulting from the new European financial regulatory architecture?

Conflicts between monetary, macroprudential and microprudential policy will challenge the ECB. To avoid this, the macroprudential mandate should be defined more narrowly. Otherwise the ECB has to continuously trade off the price stability goal against the financial stability goal.

What do you think are the largest international challenges resulting from the ECB’s expanded asset purchase program?

Ultra-expansive policy measures will weaken the Euro, especially when the Fed starts to exit from QE. Governments will be tempted to conduct beggar-thy-neighborpolicies and they will pressure their central banks to depreciate their currencies. It will be challenging for central banks to withstand political pressures.


The Future of Mercorsur: What’s at stake for the EU?
Veranstaltung, 16. Oktober 2017

Debate The Future of Mercorsur: What’s at stake for the EU?Arrow

The Cologne Institute for Economic Research (IW Köln) and the German Institute for International and Security Affairs – Stiftung Wissenschaft und Politik (SWP) are kindly inviting you to a jointly organised expert exchange on the on-going negotiations for a new trade agreement between the EU and Mercosur. mehr

11. Oktober 2017

Matthias Diermeier Wohlstand: Ohne die Hauptstadt meist geringerArrow

Berlin ist sexy, aber nach wie vor relativ arm – würde man die Hauptstadt und ihre Bewohner herausrechnen, wäre das deutsche Bruttoinlandsprodukt je Einwohner um 0,2 Prozent höher. Im übrigen Europa sieht das Bild jedoch ganz anders aus. mehr auf iwd.de

Gastbeitrag, 28. September 2017

Daniel Bendel und Markus Demary auf Focus Online Hebt die EZB die Zinsen an, bekommen 800.000 Unternehmen ProblemeArrow

Mit ihren niedrigen Zinsen hat die EZB vielen Unternehmen geholfen, die Krise zu überwinden - aber nicht allen. Würden die Zinsen steigen, hätten vor allem Firmen aus Italien, Griechenland und Frankreich ein Problem, schreiben die IW-Ökonomen Daniel Bendel und Markus Demary in einem Gastbeitrag auf Focus Online. mehr