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To be fair, the ECB has largely come around. They're even going to do a form of quantitative easing now. Unfortunately, monetary policy cannot do very much when
by nhaehnle 12y ago
To be fair, the ECB has largely come around. They're even going to do a form of quantitative easing now. Unfortunately, monetary policy cannot do very much when the interest rates are essentially zero. You'd really need fiscal policy, and so far, the German elite[0] is pretty closed-minded about that.
[0] There are other countries that tend in this direction, but Germany is the real problem due to its power.
- notahacker 12y agoSlowly coming around really isn't good enough; they really should have already started unusually aggressive forms of QE (like buying sovereign debt with a view to retiring it; and I'm not even suggesting specifically privileging the Greeks with this) rather than focusing on driving down corporate bond yields further and acting like they're worried about running out of Euros. I'm not saying I'd expect an institution where economic puritanism is so pervasive they thought interest rate rises in 2011 were a good idea would rush to try that experiment. But I am saying that if ever there was a time to contemplate trying exceptional measures, it was probably last year...