Exit Strategies and the Impact on the Euro Area, Monetary Dialogue, December 2013

15-01-2014

The papers of this compilation comment on the pros and cons of central banks exiting from unconventional monetary policy strategies (UMPs), i.e. close to zero interest rates and massively increased balance sheets. The issue of policy coordination between major central banks and the risk assessment of a premature vis-a-vis a delayed exit play a central role across the various contributions. The contributing experts share the view that UMPs have been successful in preserving the financial system, but it is less clear to what extent they have supported the real economy. Most experts thus support the return to monetary policy at its 'conventional' form as the task of monetary policy is to ensure price stability, not financial stability or the ECB taking up a quasi-fiscal role.

The papers of this compilation comment on the pros and cons of central banks exiting from unconventional monetary policy strategies (UMPs), i.e. close to zero interest rates and massively increased balance sheets. The issue of policy coordination between major central banks and the risk assessment of a premature vis-a-vis a delayed exit play a central role across the various contributions. The contributing experts share the view that UMPs have been successful in preserving the financial system, but it is less clear to what extent they have supported the real economy. Most experts thus support the return to monetary policy at its 'conventional' form as the task of monetary policy is to ensure price stability, not financial stability or the ECB taking up a quasi-fiscal role.

Externí autor

Anne SIBERT (Birkbeck, University of London and CEPR), Charles WYPLOSZ (Graduate Institute of International and Development Studies, Geneva), Stefan COLLIGNON (Scuola Superiore Sant'Anna, Pisa and Centro Europa Ricerche - CER, Rome) with research assistance performed by Piero ESPOSITO, Ansgar BELKE (University of Duisburg-Essen and IZA, Bonn) and Guillermo de la DEHESA (Centre for Economic Policy Research CEPR, London)