What is it about?
This article reviews how the European Central Bank (ECB) implemented its monetary policy for the euro area from 1999 to 2018 from the Keynesian perspective of secular stagnation and from the Austrian perspective of financial excesses. Both paradigms appear relevant when examining the monetary and financial aspects of the euro area business cycle and the secular decline of interest rates over the first 20 years of the euro's existence.
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Why is it important?
The institutional architecture of Europe's Economic and Monetary Union (EMU) was unable to deliver the balanced macroeconomic and financial policy mix required for a sustainable path of the euro area economy. For most of the time, ECB monetary policy was therefore the ‘only game in town’ for providing stability.
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This page is a summary of: Twenty Years of European Central Bank Monetary Policy: A Keynesian and Austrian Perspective, Jahrbücher für Nationalökonomie und Statistik, March 2019, De Gruyter,
DOI: 10.1515/jbnst-2018-0078.
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