Monetary Policy Crisis Management as a Threat to Economic Order

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. The paper analyses the effects of the monetary policy crisis management of the European Central Bank on the economic order of Germany. It is argued that in post-war Europe the German social market economy as designed by Eucken (1952) and Müller-Armack (1966) has been a core element of growth, welfare, social cohesion and political stability in Germany and Europe as a whole. It is shown that the monetary policy rescue measures of the European Central Bank have undermined the constitutive principles of the German social market economy, what has considerably contributed to the erosion of (productivity) growth and welfare in Germany and Europe. As the outcome is crumbling social cohesion and growing political instability, a timely exit from ultra-expansionary monetary policy is postulated. Terms of use: Documents in EconStor mayJEL-Codes: B200, E140, B250.

Seventy‐five years West German currency reform: Crisis as catalyst for the erosion of the market order

“…2.1 | Eucken's theoretical foundation Eucken (1952) as one the founders of German ordoliberalism had developed seven constitutive principles of a market economy (see also Freytag & Schnabl, 2017). They constituted the framework for a liberal economic order which was to be embedded in a liberal constitutional state (interdependence of orders).…”

The Brexit as a Forerunner: Monetary Policy, Economic Order and Divergence Forces in the European Union

“…The downside is that the constitutive principles of the market-oriented order have become undermined (see Freytag and Schnabl 2017). First, the free-market interest rate mechanism has become disrupted.…”

The Failure of ECB Monetary Policy from a Mises-Hayek Perspective

“…The resulting gradual implementation of the four freedoms -i.e. free movement of goods, services, capital and labor -created additional growth and welfare gains (see Freytag and Schnabl 2017 as inflation rates in all EMU member states converged towards the German benchmark (see Figure 4). …”