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Current and Future ECB Monetary Policy

Author

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  • Philip Arestis

    (Cambridge Centre for Economic and Public Policy, Department of Land Economy, University of Cambridg and University of the Basque Country UPV/EHU)

Abstract

This paper examines the operations of the European Central Bank (ECB) with respect to monetary policy, along with its effects on inflation, exchange rate and financial stability. It also discusses how the regulatory role of the ECB should be improved in the future. In this way, the paper discusses the involvement of the ECB in regulatory policy towards the financial sector, and the responses of the ECB to the financial crisis, instability and banks’ illiquidity and insolvency, as well as to sovereign insolvency. It begins with the current set up of the European Monetary Union (EMU) along with the theoretical principles of the EMU model, and the extent to which it conforms with the theoretical framework of the New Consensus Macroeconomics and its policy implications, namely inflation targeting. Problems with the current EMU arrangements are then discussed, followed by changes in view of the August 2007 financial crisis and the ‘great recession’. Required ECB changes, and of course changes in monetary policies are discussed before we finally summarize and conclude.

Suggested Citation

  • Philip Arestis, 2014. "Current and Future ECB Monetary Policy," Working papers wpaper28, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
  • Handle: RePEc:fes:wpaper:wpaper28
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    File URL: http://fessud.eu/wp-content/uploads/2013/04/FESSUD_ECB-monetary-policy_Arestis_Working-Paper28.pdf
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    Cited by:

    1. Michal Jurek & Pawel Marszalek, 2015. "Policy alternatives for the relationship between ECB monetary and financial policies and new member states," Working papers wpaper112, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.

    More about this item

    Keywords

    European Central Bank; Monetary Policy; European Monetary Union; Current and Future Developments.;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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