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2020 | OriginalPaper | Buchkapitel

7. Count Draghila

verfasst von : Sergio Cesaratto

Erschienen in: Heterodox Challenges in Economics

Verlag: Springer International Publishing

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Abstract

This chapter examines the European crisis from the point of view of monetary policy. Based on the monetary issues discussed in the previous chapters, we explain how monetary policy works in ordinary circumstances. We then look at non-conventional measures initiated by the ECB in 2008. The ECB’s action became more effective with Draghi, but could only partially make up for the absence of appropriate European fiscal policy. In fact, European fiscal policy, based on pursuit of a balanced budget and obsession with public debt, does not work in tandem with monetary policy. From a Keynesian viewpoint, the central bank should primarily serve fiscal policy in the pursuit of full employment as well as price stability. Finally, we explain a controversy that raged in 2011–2012, but has never really died down: Target2, the European payment system. Appendix 1 completes our analysis of ECB monetary policy from a central bank balance sheet perspective. This is an excellent vantage point for reviewing conventional and unconventional monetary policies. Appendix 2 provides further details of Target2, discussing whether Target2 imbalances constitute real debt between EMU countries.

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Fußnoten
1
Borio (1997, p. 14).
 
2
Borio and Disyatat (2009, p. 3).
 
4
Draghi (2014).
 
5
Buti (2020, pp. 7–8).
 
6
See Chap. 5, Further Reading.
 
7
Bindseil (2004a, p. 41).
 
8
Koo (2011).
 
9
Bindseil et al. (2015).
 
11
Schnabel (2020).
 
12
Eurointelligence, 6 April 2020.
 
13
Sinn (2018).
 
14
As summed up by Constâncio (2016).
 
15
Hicks (1937, p. 155).
 
16
Cf., e.g. Zolo (2002).
 
17
Eugenio Montale, “‘Non chiederci la parola che squadri da ogni lato’” (“‘Don’t ask us for the word to frame’”), translated by Jonathan Galassi, quoted by McKendrick (1999).
 
18
This section was inspired by Mercier (2014).
 
19
Chaundy (1999, p. 12).
 
20
European Central Bank (2012, p. 36).
 
21
Note: The figure shows the Eurosystem’s monetary policy operations from a balance sheet point of view from 2007 to July 2018. In the upper part, there are the liquidity providing operations for the various types of MRO, LTRO and QE (outright purchases) (see glossary at the beginning of the volume). The dashed line represents the system’s net liquidity requirements due to factors such as demand for banknotes and compliance with minimum reserves (see box “Repetita iuvant” in appendix 1). If we subtract this liquidity requirement from the liquidity created by monetary measures, we obtain excess liquidity. The lower part shows where this excess lies, typically in the deposit facility or as an excess in the reserve and settlement account (daily reserve surplus).
 
22
European Commission (2015, p. 9).
 
23
Bagnai (2012, p. 392).
 
24
Minenna et al. (2018, p. 152).
 
25
Sinn (2018).
 
26
Cour-Thimann (2013).
 
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Metadaten
Titel
Count Draghila
verfasst von
Sergio Cesaratto
Copyright-Jahr
2020
DOI
https://doi.org/10.1007/978-3-030-54448-5_7