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The monetary pillar and the great financial crisis

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Abstract

Since its inception, a most distinctive (and controversial) feature of the ECB monetary policy strategy has been its emphasis on money and monetary analysis, which constitute the basis of the so-called monetary pillar. The present paper examines the performance of the monetary pillar around the recent financial crisis episode, and discusses its prospects in light of the renewed emphasis on financial stability and the need for enhanced macro-prudential policies.

Suggested Citation

  • Jordi Galí, 2010. "The monetary pillar and the great financial crisis," Economics Working Papers 1223, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:1223
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    1. Svensson, Lars E. O., 1999. "Monetary policy issues for the Eurosystem," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 51(1), pages 79-136, December.
    2. André Sapir & Marco Buti, 1998. "Economic policy in EMU," ULB Institutional Repository 2013/8078, ULB -- Universite Libre de Bruxelles.
    3. Moritz Schularick & Alan M. Taylor, 2012. "Credit Booms Gone Bust: Monetary Policy, Leverage Cycles, and Financial Crises, 1870-2008," American Economic Review, American Economic Association, vol. 102(2), pages 1029-1061, April.
    4. Christiano, Lawrence & Motto, Roberto & Rostagno, Massimo, 2010. "Financial factors in economic fluctuations," Working Paper Series 1192, European Central Bank.
    5. Philip Lowe & Claudio Borio, 2002. "Asset prices, financial and monetary stability: exploring the nexus," BIS Working Papers 114, Bank for International Settlements.
    6. Claudio Borio, 2008. "The financial turmoil of 2007-?: a preliminary assessment and some policy considerations," BIS Working Papers 251, Bank for International Settlements.
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    Cited by:

    1. Landais, Bernard, 2011. "Conduite et efficacité de la politique économique : les leçons de la crise [Management and Efficiency of the Economic Policies : The Crisis' Lessons"]," MPRA Paper 31223, University Library of Munich, Germany.
    2. Lenz, Rainer, 2015. "Banking 2025: The Bank of the Future," EconStor Preprints 110466, ZBW - Leibniz Information Centre for Economics.
    3. Axel A. Weber, 2011. "Challenges for monetary policy in the European Monetary Union," Review, Federal Reserve Bank of St. Louis, vol. 93(July), pages 235-242.
    4. Dybowski, T. Philipp & Kempa, Bernd, 2020. "The European Central Bank’s monetary pillar after the financial crisis," Journal of Banking & Finance, Elsevier, vol. 121(C).

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    More about this item

    Keywords

    monetary policy strategy; two pillar strategy; monetarism; financial stability.;
    All these keywords.

    JEL classification:

    • 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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