vendredi 16 janvier 2015
Mario Draghi’s Dilemma
Posted on 09:09 by nice news
Quantitative easing, the label now used for large-scale purchases of bonds by a central bank, is not a new phenomenon. The Federal Reserve, the Bank of Japan and the Bank of England have done it. So why so much attention on whether the European Central Bank will launch its own version at its Jan. 22 meeting?
Because Europe, again, is the biggest threat to global economic growth right now. And because the ECB–responsible for a currency shared by 19 sovereign governments–is in a much more complicated situation than the Fed or other central banks.
If central banking were an Olympic event judged by the degree of difficulty, the ECB would get good scores. “But it is not,” says Mohamed el-Erian, chief economic adviser at Allianz and a former top PIMCO executive. “Central banks will be judged by their success in delivering on ambitious macroeconomic objectives with frustratingly partial means. The prospects aren’t reassuring.”
In one respect, the ECB faces a very clear case for QE. Its mandate is price stability, defined as inflation close to but under 2%. But consumer prices in the euro area fell by 0.2% in the 12 months of 2014, according to the latest Eurostat estimates.
Because Europe, again, is the biggest threat to global economic growth right now. And because the ECB–responsible for a currency shared by 19 sovereign governments–is in a much more complicated situation than the Fed or other central banks.
If central banking were an Olympic event judged by the degree of difficulty, the ECB would get good scores. “But it is not,” says Mohamed el-Erian, chief economic adviser at Allianz and a former top PIMCO executive. “Central banks will be judged by their success in delivering on ambitious macroeconomic objectives with frustratingly partial means. The prospects aren’t reassuring.”
In one respect, the ECB faces a very clear case for QE. Its mandate is price stability, defined as inflation close to but under 2%. But consumer prices in the euro area fell by 0.2% in the 12 months of 2014, according to the latest Eurostat estimates.
Mario Draghi’s Dilemma
Categories: Mario Draghi’s Dilemma
Inscription à :
Publier les commentaires (Atom)
0 commentaires:
Enregistrer un commentaire