1. Home
  2. Studien
  3. Does the ECB’s Unconventional Monetary Policy Endanger the Exit from the Current Low Interest Rate Environment?
Markus Demary / Michael Hüther IW-Policy Paper Nr. 7 26. Februar 2015 Does the ECB’s Unconventional Monetary Policy Endanger the Exit from the Current Low Interest Rate Environment?
PDF herunterladen
Does the ECB’s Unconventional Monetary Policy Endanger the Exit from the Current Low Interest Rate Environment?
Markus Demary / Michael Hüther IW-Policy Paper Nr. 7 26. Februar 2015

Does the ECB’s Unconventional Monetary Policy Endanger the Exit from the Current Low Interest Rate Environment?

IW policy paper

PDF herunterladen

Teilen Sie diesen Artikel:

oder kopieren Sie den folgenden Link:

Der Link wurde zu Ihrer Zwischenablage hinzugefügt!

Many Eurozone governments, corporations and private households are still involved in an unfinished balance sheet repair process. Debt levels are still high and there are looming risks that negative developments, e.g. deflationary dynamics, cause debt to become unsustainable. The state of these Eurozone countries is comparable to a patient who recovers from a bad disease and whose immune system is not yet able to protect him from further infections. Despite the still unstable Eurozone, the European Central Bank’s (ECB) monetary policy measures, especially its large-scale asset purchase program, are under attack. This policy paper will show that overcoming the Eurozone balance sheet recession is the only way to enable monetary policy to exit from the low interest rate environment. Hence, the ECB’s current monetary policy stance is imperative against the background of the still unfinished balance sheet recession. Moreover, it demonstrates that the ECB’s unconventional monetary policy measures do neither contradict a speedy exit from the low interest rate environment nor do they contradict a continuation of the supply-side reform agenda. In fact, policy measures that increase potential growth and stabilize inflation expectations are inevitable to enable a successful deleveraging. In light of this, the ECB’s large-scale asset purchase program is a strong signal that could bring inflation expectations back to the vicinity of the ECB’s inflation target. Stabilized expectations in turn will pave the way for a successful balance sheet repair. Only a finished balance sheet recession enables a successful exit from the low interest rate environment. Although necessary, the ECB’s large-scale asset purchases have risky side-effects. Attenuating these side-effects, however, is the responsibility of national governments because the ECB’s monetary policy can only prevent deflationary dynamics. It is not a substitute for supply-side reforms.

PDF herunterladen
Does the ECB’s Unconventional Monetary Policy Endanger the Exit from the Current Low Interest Rate Environment?
Markus Demary / Michael Hüther IW-Policy Paper Nr. 7 26. Februar 2015

Markus Demary / Michael Hüther: Gefährden die unkonventionellen Maßnahmen der EZB den Ausstieg aus dem Niedrigzinsumfeld?

IW policy paper

PDF herunterladen

PDF herunterladen
Markus Demary / Michael Hüther IW-Policy Paper Nr. 7 26. Februar 2015

Markus Demary / Michael Hüther: Does the ECB’s Unconventional Monetary Policy Endanger the Exit from the Current Low Interest Rate Environment?

IW policy paper

PDF herunterladen

Teilen Sie diesen Artikel:

oder kopieren Sie den folgenden Link:

Der Link wurde zu Ihrer Zwischenablage hinzugefügt!

Mehr zum Thema

Artikel lesen
Gespaltene Industriekonjunktur in Deutschland
Hubertus Bardt / Markus Demary / Michael Grömling / Michael Hüther IW-Report Nr. 34 10. September 2021

Gespaltene Industriekonjunktur in Deutschland

Nach den ersten Infektionswellen im Frühjahr 2020 mit der Folge einer globalen Stillstandsökonomie und den Belastungen im folgenden Winterhalbjahr haben sich die Spielregeln in vielen fortgeschrittenen Volkswirtschaften gewaltig verändert.

IW

Artikel lesen
Kaufkraft iwd 18. Juni 2021

Big-Mac-Index: Der etwas andere Wechselkurs

Ökonomiestudenten lieben den Big-Mac-Index, weil er das Zusammenspiel von Wechselkurs und Preisniveau so anschaulich macht. Seine Aussagekraft ist allerdings eingeschränkt.

iwd

Mehr zum Thema

Inhaltselement mit der ID 8880