The ECB’s Monetary Analysis Revisited

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Monetary aggregates continue to play an important role in the ECB's policy strategy. This paper revisits the case for money, surveying the ongoing theoretical and empirical debate. The key conclusion is that an exclusive focus on non-monetary factors alone may leave the ECB with an incomplete picture of the economy. However, treating monetary factors as a separate matter is a second-best solution. Instead, a general-equilibrium inspired analytical framework that merges the economic and monetary "pillars" of the ECB's policy strategy appears the most promising way forward. The role played by monetary aggregates in such unified framework may be rather limited. However, an integrated framework would facilitate the presentation of policy decisions by providing a clearer narrative of the relative role of money in the interaction with other economic and financial sector variables, including asset prices, and their impact on consumer prices. Terms of use: Documents in EconStor mayJEL Classification Numbers: C11, C30, E31, E40

Euro Area Monetary Policy in Uncharted Waters

“…See, for example, the speech by José Manuel González-Páramo on "Financial market failures and public policies: A central banker's perspective on the global financial crisis", January 2009.3 As argued inBerger, Harjes, and Stavrev (2008), the ECB's two pillar approach (which includes a monetary pillar which gives high prominence to monetary aggregates in determining the appropriate policy stance) may have made communication more challenging Bulíř, Čihák, and Šmídková (2008). arrive at a similar conclusion.4 For a description of the ECB's enhanced credit support, see in particular the speech by Jean-Claude Trichet, President of the ECB, at the University of Munich on July 13, 2009, and "Governing Council decisions on nonstandard measures," ECB Monthly Bulletin, June 2009, pp.…”

Euro Area Monetary Policy in Uncharted Waters

“…See, for example, the speech by José Manuel González-Páramo on "Financial market failures and public policies: A central banker's perspective on the global financial crisis", January 2009.3 As argued inBerger, Harjes, and Stavrev (2008), the ECB's two pillar approach (which includes a monetary pillar which gives high prominence to monetary aggregates in determining the appropriate policy stance) may have made communication more challenging Bulíř, Čihák, and Šmídková (2008). arrive at a similar conclusion.4 For a description of the ECB's enhanced credit support, see in particular the speech by Jean-Claude Trichet, President of the ECB, at the University of Munich on July 13, 2009, and "Governing Council decisions on nonstandard measures," ECB Monthly Bulletin, June 2009, pp.…”