The ECB’s ‘unorthodox’ monetary policy [What Think Tanks are thinking]

Written by Marcin Grajewski

In March 2015, the European Central Bank (ECB) launched its quantitative easing (QE) programme, the so-called Public Sector Purchase Programme, under which the ECB buys financial assets from euro-area banks, corporations or governments. This 60 billion euro per month scheme is aimed at putting downward pressure on bond yields, warding off deflationary risks, and generally, stimulating the economy by lowering the interest rate carried by various financial instruments.

According to many analysts, the ECB’s action has helped to contain deflation and lowered the borrowing costs of euro zone countries previously encountering sovereign debt problems. The ECB’s critics say its unorthodox actions, which followed similar operations by the US Federal Reserve, the Bank of England and the Bank of Japan, could still stoke inflation over the mid-term. The European Court of Justice ruled on 17 July that the crisis-fighting plan of the ECB to buy government bonds in potentially unlimited quantities was legal.

This note offers a selection of recent studies, reports and commentaries by some of the major think tanks and research institutes analysing the question of QE and other ECB policies.

Commentaries

Euro 2.0
Itinera, 18 May, 2015

What the euro zone could learn from Switzerland
Institute of Economic Affairs, 18 May, 2015

Why we should not blame the ECB for low returns on German savings
Bruegel, 7 May, 2015

Bond purchases only effective together with reforms
Cologne Institute for Economic Research, 15 April, 2015

ECB Quantitative Easing on track
Bruegel, April 7, 2015

Money growth in the euro area is speeding up
Bruegel, 2 April, 2015

The weird new world of negative interest
Itinera, 26 March, 2015

QE – “European style”: be bolder, but parsimonious!
CEPII, 24 March, 2015

The ECB fears deflation, but you should not
Mises Institute, 4 February, 2015

The ECB’s QED: will quantitative easing work for Europe?
Chatham House, 23 January, 2015

The ECB’s stimulus buys time
Brookings Institution, 27 January, 2015

Dramatic news on QE – ECB takes steps to fulfil its price stability mandate
Social Europe, 22 January, 2015

ECB faces crucial test of “whatever it takes”
Friends of Europe, 20 January, 2015

Analyses

The QE placebo
Centre for European Policy Studies, 12 June, 2015

The ‘visible hand’ of the ECB’s quantitative easing
Centre for European Policy Studies, 22 May, 2015

Quantity theory of money redux? Will inflation be the legacy of Quantitative Easing?
Peterson Institute for International Economics, May 2015

A holistic approach to ECB asset purchases, the Investment Plan and CMU
CEPII, April 2015

The financial stability risks of ultra-loose monetary policy
Bruegel, 26 March, 2015

The ECB’s QE: time to break the doom loop between banks and their governments
Centre for European Policy Studies, 13 March, 2015

European Central Bank quantitative easing: the detailed manual
Bruegel, 11 March, 2015

Does the ECB’s unconventional monetary policy endanger the exit from the current low interest rate environment?
Cologne Institute for Economic Research, 26 February, 2015

The ECB’s QE: the rule of law, democratic politics and incomplete contracts
Harvard Kennedy School, 5 February, 2015

Danish currency wobbles: a positive unintended side effect of the ECB’s QE?
Centre for European Policy Studies, 6 February, 2015

Risks of a deflation in the EMU. Why is this time so deceitful?
LUISS School of European Political Economy, 21 January, 2015

Quel policy mix de sortie de crise pour la zone euro?
Institut francais des relations internationales, January, 2015