Global Currencies During a Crisis
The current crisis has confirmed the importance of the currency swap lines offered by the Federal Reserve. They enhance the role of the USD as the dominant global currency. However, one should not expect much impact on the international role of the euro when the ECB offers similar currency swap lines. Currency competition is not […]
Reaching a Wider Audience
Central banks are increasingly recognising the importance of communicating with the wider public. We document that interest in monetary policy is intermittent, usually linked to major decisions and/or personnel changes. The ECB should not expect that every one of its decisions is noticed by the general public. The Monetary Dialogue fulfils the typical function of […]
The Two-pillar Strategy of the ECB
Inflation has remained below the ECB’s own target of ‘below, but close to 2%’ for a long time despite massive doses of unconventional policies, suggesting that the present ‘two pillar’ strategy does not work. A review of the strategy will be useful only if it is entrusted to independent experts. Otherwise, it is likely to […]
Global Trends in Inflation
The ECB will not be able to achieve its inflation target over the foreseeable future. Further expansionary measures will have at most a modest impact on financial market conditions and even less on overall demand. Moreover, the impact of any demand stimulus on inflation is highly uncertain. The reasons for low inflation persistence despite tight […]
Does a single monetary policy need a single fiscal counterpart?
The absence of a single fiscal policy in the euro area does not necessarily constitute a problem for the ECB. In a deep financial crisis poorly coordinated national fiscal policies are likely to be insufficient. But outside crisis periods spill-over effects of fiscal policy are likely to be small and of uncertain sign. Moreover, fiscal […]