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I trust the ECB to miss their targets. It is part of the job description setup. You are trying to control a chaotic system with one knob and you have to follow
by eftychis 4y ago
I trust the ECB to miss their targets. It is part of the job description setup. You are trying to control a chaotic system with one knob and you have to follow a manual that gets rewritten with past learnings:
a) if the issue reoccurs, the learnings are ineffective
b) if the issue is new, how can you tell how to move the knob without pissing a lot of people and losing your job.
It is a lose-lose game.
- WeylandYutani 4y agoThe ECB problem is that they have to run a collective of wildly varying economies. What's good for the Netherlands would destroy Italy. The genius solution that they came up with is transfering billions of taxpayer money from the North to the South- which is not very popular among voters.
- drexlspivey 4y agoThey have two knobs, setting interest rates and their balance sheet
- eftychis 4y agohttps://www.ecb.europa.eu/pub/pdf/other/art01_eb201504.en.pd https://www.ecb.europa.eu/pub/pdf/other/art01_eb201504.en.pd The balance sheet is used to direct effective interest rates intramarket -- not a separate knob.