Quantitative Easing Forever? Financialisation and the Institutional Legitimacy of the Federal Reserve’s Unconventional Monetary Policy

Ronkainen, Antti; Sorsa, Ville-Pekka

doi:10.1080/13563467.2018.1384455

Cited by 19 publications

(12 citation statements)

References 52 publications

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“…These numbers are elevated from an historical perspective and are certainly impacted by various rounds of quantitative easing (QE) in the aftermath of the 2008 crisis (Kiley, 2018;Ronkainen and Sorsa, 2018;Matousek et al, 2019). The response to the COVID-19 crisis also played a role as the reported growth rates are at their highest levels in 2020 for every currency.…”

Section: Supply Sidementioning

confidence: 99%

Bitcoin’s value proposition: shorting expansionary monetary policies

Morillon

2021

SEF

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Purpose Professionals and academics alike hold polarized opinions about Bitcoin’s purpose and its fundamental value. This paper aims to describe Bitcoin’s unique features that make it such an intriguing asset and proposes a new way to consider Bitcoin and its underlying value. Design/methodology/approach In this paper the author discusses Bitcoin’s defining features that make it a unique asset. The author argues that Bitcoin should not be considered as a single purpose asset only, but rather as a new digital financial asset serving several functions, at least partially. The author discusses the role of Bitcoin in the traditional financial system, contrasts Bitcoin to gold, considers the implications of the continuance of expansionary policies on Bitcoin and discusses the impact of the emergence of cryptocurrencies as a new asset class on public policies. Findings In addition to functioning as a means of payment (at least partially) and a diversification tool, part of Bitcoin’s value proposition stems from its worth as a short position on modern expansionary monetary policies. Indeed, Bitcoin’s value should rise if expansionary monetary policies are maintained, amounting to a tool to short these policies, which should be considered in future attempts to value Bitcoin. Originality/value The author adds a new layer to the ongoing thought process by arguing of a function played by Bitcoin unaccounted for thus far by the literature. Additionally, the author describes the features and mechanisms, allowing Bitcoin to play that role.

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Section: Supply Sidementioning

confidence: 99%

Bitcoin’s value proposition: shorting expansionary monetary policies

Morillon

2021

SEF

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“…In practice, however, popular opinion does matter to central banks. In fact, they tend to be acutely aware of their own tenuous legitimacy and this shapes their decision-making (Braun, 2018a;Ronkainen & Sorsa, 2018;. The rescue of banks in 2008 involved discretionary interventions on the side of central banks, but generally in coordination with the treasury and other government agencies (Calomiris & Khan, 2015;Bateman, 2020).…”

Section: Central Bank Independence Todaymentioning

confidence: 99%

Central Banks

Klooster¹

2020

Preprint

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This chapter provides an overview of the state of the art in constitutional theory with regard to the topic of central banks. It challenges accounts of central bank independence as involving limited discretion and distributional choices, as well as the narrow range of normative questions that such accounts raise. It also provides a roadmap for a vast range of procedural and substantive issues raised by independent central banks.

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“…Following 2008, the ECB has pursued a 'full allotment' policy, whereby the urgent dry-up of liquidity was countered by central banks lending freely to banks against considerably more 'supple' definitions of what was deemed 'eligible' collateral (as one central bank interviewee puts it). This was followed by major regulatory and ideational changes (Baker 2015, Ronkainen andSorsa 2018). However, while the financial crisis has passed, the world economic system has not rebalanced (Schwartz 2016), nor has the EU's governance response (Braun and Hübner 2018).…”

Section: Breakdown Of Monetary Policy and (Re-)manifestation Of The Ementioning

confidence: 99%

Money and the ‘Level Playing Field’: The Epistemic Problem of European Financial Market Integration

Krarup

2019

New Political Economy

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Financial market integration processes in the European Union (EU) are characterised by an epistemic problem of economic theory. This problem encompasses what 'the market' is, how it is to be 'integrated', and the nature and role of 'money' as infrastructure of the fully integrated market. The EU's legal framework has imported this epistemic problem along with the competitive conception of the market as described in economic theory-as a 'level playing field' for private exchange, under free, fair and ideally unrestrained competition. It manifests itself in European financial market integration processes, as exemplified in the article, via two otherwise disconnected areas of European Central Bank (ECB) activity: (a) the provision of central bank credit for the purpose of financial transaction settlement in the Eurozone; and (b) the conduct of ordinary monetary policy in the Eurozone. While the problem can be stabilized through legal, technical and other means, it remains latent, and may manifest itself again in unexpected ways, as happened in the wake of the 2008 financial crisis. Thus, contrary to ideologies that are widely understood as more or less coherent systems of doctrines, epistemic problems are characterised by specific tensions, contradictions and conceptual uncertainties.

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Quantitative Easing Forever? Financialisation and the Institutional Legitimacy of the Federal Reserve’s Unconventional Monetary Policy

Cited by 19 publications

References 52 publications

Bitcoin’s value proposition: shorting expansionary monetary policies

Bitcoin’s value proposition: shorting expansionary monetary policies

Central Banks

Money and the ‘Level Playing Field’: The Epistemic Problem of European Financial Market Integration

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