How Can it Work? On the Impact of Quantitavie Easing in the Eurozone

Saraceno, Francesco; Tamborini, Roberto

doi:10.2139/ssrn.2711212

Cited by 3 publications

(4 citation statements)

References 33 publications

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“…Hence two problems emerge. The first is the reliability of the classical mechanism; the second is the role of fiscal policy in the adjustment process (Saraceno and Tamborini 2015).…”

Section: Policy Implicationsmentioning

confidence: 99%

“…The former relates to future sustainability of public debt, the latter to the reduction of current domestic absorption. Moreover, if the sudden-stop view of the crisis is correct, then policymakers should have anticipated that the capital reversal out of deficit countries would have generated (at least in part) the required adjustment by itself with no need of further fiscal doses (Saraceno and Tamborini 2015). Indeed, "turning to fiscal policy, a macro-prudential framework entails a "leaning against the wind" strategy in relation to the financial cycle as well as the output cycle" (Lane 2013, p. 33).…”

Section: Policy Implicationsmentioning

confidence: 99%

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Current Account Imbalances and the Euro Area. Alternative Views

Mazzocchi

Tamborini

2019

SSRN Journal

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The crucial role of current account imbalances (CAI) is widely acknowledged in the consensus narratives of the European crisis that followed the Great Recession. On the basis of this interpretation, new EU initiatives arose, in particular the so-called "Six Pack" in 2011 and the establishment of the European Semester procedure to improve policy coordination in the EU beyond fiscal matters. This package includes the Macroeconomic Imbalances Procedure (MIP), which broadens the EU economic governance framework to include the surveillance of unsustainable macroeconomic trends. Although the widening of the CAI in the Euro Area is a matter of fact, and the consensus narrative contains elements of truth, alternative views have been put forward on three main issues: i) their relevance, ii) their causes and connection with the crisis, and iii) their policy implications. The aim of this paper is to examine these controversial points about the causes, meaning and consequences of CAI, and discuss the alternative policy prescriptions that emerge.

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“…Hence two problems emerge. The first is the reliability of the classical mechanism; the second is the role of fiscal policy in the adjustment process (Saraceno and Tamborini 2015).…”

Section: Policy Implicationsmentioning

confidence: 99%

Section: Policy Implicationsmentioning

confidence: 99%

Current Account Imbalances and the Euro Area. Alternative Views

Mazzocchi

Tamborini

2019

SSRN Journal

Self Cite

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“…In the case of ECB, the unofficial objective of credit policies is the reduction of national interest rate spreads. Saraceno and Tamborini (2015) argue that for the ECB balance sheet policies to help closing individual countries' output gaps, fiscal accommodation at the country level should also intervene. 22 It may be worth to recall that the ECB reacted to such disorders before the Federal Reserve (in order to protect German banks' exposure on US markets).…”

Section: Theoretical and Policy Implicationsmentioning

confidence: 99%

Banking theories and macroeconomics

Bianco

Sardoni

2018

Journal of Post Keynesian Economics

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The recently expanding macro-financial literature is facing the analytical challenge to analyse the working of modern market economies without losing touch with the factual role played by financial institutions. Mainstream macroeconomic models that embody a financial sector are characterized by the understanding of banks as intermediaries of loanable funds (deposit-taking paving the way for loan extension). This approach to banking is increasingly considered as a major flaw in macroeconomic thinking. The Post-Keynesian theory of inside money creation is gaining momentum even in mainstream circles. The present article highlights the key differences of these alternative doctrines from a money supply perspective, so to stress the key aspects of the monetary dimension of the so-called financial cycle and the fact that monetary policy alone has no impact on aggregate expenditure.

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“…By statute, the ECB is not allowed to pursue ad hoc policies on a national basis. Its Asset Purchase Programme launched in 2015, the so-called "quantitative easing", where the country distribution of purchases is crucial, has been carefully designed in order to overcome objections on this ground with the consequence of weakening its chances of success (Saraceno and Tamborini 2015). It is quite likely that, in the case of fiscal policy, or other public policies, these obstacles would be even harder to overcome.…”

Section: Centralised Technocracymentioning

confidence: 99%

Why Is Europe Engaged in an Inter-Dependence War, and How Can It Be Stopped?

Andreozzi

Tamborini

2017

SSRN Journal

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There is large evidence that European countries, the EMU in particular, are engaged in an interdependence war, i.e. non-cooperative policies with huge social and economic costs due to mutual negative externalities. In this regard, the EMU as a supranational institution with the overarching end to generate and distribute collective benefits from integration and policy coordination seems off the mark. We present a policy game between two interdependent countries showing that the causes and consequences of interdependence wars lye in non-cooperative strategies dictated by the national social preferences over "good" but costly policy choices embedded into the government's policy function. By means of the model we examine what supranational policy regimes may achieve a Pareto improvement. Among the latter, one that we call "Europe", minimises the additive loss function of the two countries. The thrust of our analysis is that the supranational regimes which do not take national preferences into account, dubbed "technocratic regimes", are dominated, so that the single alternative is between Europe and "exit" for the non-cooperative regime. An important result is that Europe is the Pareto-dominant regime only within a limited range of asymmetry between countries' social preferences. The paper concludes with some political-economic implications for the reform of the EMU.

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How Can it Work? On the Impact of Quantitavie Easing in the Eurozone

Cited by 3 publications

References 33 publications

Current Account Imbalances and the Euro Area. Alternative Views

Current Account Imbalances and the Euro Area. Alternative Views

Banking theories and macroeconomics

Why Is Europe Engaged in an Inter-Dependence War, and How Can It Be Stopped?

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