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Tag Archives: Monetary Policy

Africa’s battle with COVID-19

How can we ensure a worldwide balanced and inclusive recovery from the Covid pandemic? Before the pandemic, Africa was experiencing unprecedented economic growth and poverty reduction. While many economies have faced disruption around the globe, emerging economies face an even tougher challenge because they lack the tools at the disposal of developed countries, whether that be vaccines, macroeconomic liquidity or the ability of the labour market to work from home. The global nature of the...

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How has COVID-19 affected inflation measurement in the euro area?

COVID-19 has complicated inflation measurement. Policymakers need to take this into account and should look at alternative measures of inflation to understand what is actually happening in the economy. It might seem minor alongside the huge damage to people and economies done by COVID-19, but one of the consequences of the pandemic has been to throw into disarray the measurement of inflation. Eurostat’s final estimate for inflation in the euro-area in January 2021 showed the biggest increase...

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Can central banks save the planet?

“We are not going to lead our society to a low-carbon economy by continuing to finance the status quo. “ Central bankers now seem keen to take on responsibility for policy objectives they have previously shied away from – in particular, tackling climate change. European Central Bank President Christine Lagarde acknowledged in January that central bankers will have to look beyond their traditional duties to address the challenge. ECB Executive Board Member Isabel Schnabel said in September...

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A brown or a green European Central Bank?

The European Central Bank portfolio is skewed towards the brown economy, reflecting a bias in the market. Can and should the bank deviate from the market allocation? Climate change is a hotly debated issue in the European Central Bank’s ongoing strategy review. While ECB president Christine Lagarde and her colleagues at the centre favour robust tools to tackle climate change, most national central bank governors (like their colleagues at the US Fed) seem to be against including climate...

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Central banking’s brave new world

Ever since the 2008 financial crisis, central bankers have been busy developing new policy instruments to fight fires and ward off emerging threats. Nonetheless, many secretly dreamed of returning to the good old days of cautious conservatism (with financial stability taken seriously). By: Jean Pisani-Ferry Date: February 24, 2021 Topic: Global Economics & Governance This opinion piece was originally published in Project Syndicate. Twenty years ago, central bankers were...

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Monetary policy in the time of COVID-19, or how uncertainty is here to stay

The COVID-19 crisis has compounded the uncertainty that has come to characterise the European economy. We explore how this uncertainty manifests itself in terms of ECB decision-making and the long-run challenges the ECB faces. This paper was prepared for the European Parliament’s Requested by the ECON committee. The original paper is available on the European Parliament’s webpage, as part of a series of papers on “Effects ofPandemic-InducedUncertainty onMonetary Policy” (here). Copyright...

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How Can the European Parliament Better Oversee the European Central Bank?

This paper, written at the request of the Committee on Economic and Monetary Affairs, assesses how the European Parliament holds the European Central Bank accountable. The same exercise is done for the Bank of Japan, in order to identify possible lessons for the ECB and the European Parliament. This paper was prepared for the European Parliament’s Committee on Economic and Monetary Affairs (ECON) as an input to the Monetary Dialogue of 28 September 2020 between ECON and the President of the...

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COVID-19’s reality shock for external-funding dependent emerging economies

COVID-19 is by far the biggest challenge policymakers in emerging economies have had to deal with in recent history. Beyond the potentially large negative impact on these countries’ fiscal accounts, and the related solvency issues, worsening conditions for these countries’ external funding are a major challenge. COVID-19 has brought to light a reality that had been mostly forgotten in an era of ample dollar liquidity: the excessive dependence of emerging economies on external financing. The...

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The message in the ruling

The German Constitutional Court's ruling on the ECB's asset purchase programme is open to much criticism but it can hardly be blamed for raising an important question. By: Jean Pisani-Ferry Date: May 12, 2020 Topic: European Macroeconomics & Governance From its pretence to establish itself as a custodian of the custodians to the narrowness of its perspective on central bank policy and the parochial assessment of the distributional consequences of monetary decisions, there is...

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