The Monetary Policies of the European Central Bank and the Euro's (Mal)Performance: A Stability-Oriented Assessment

Jerome Levy Institute at Bard College Working Paper No. 338

10 Pages Posted: 1 Oct 2001

See all articles by Jörg Bibow

Jörg Bibow

Skidmore College - Department of Economics; Bard College - Levy Economics Institute

Date Written: September 2001

Abstract

The stability-oriented macroeconomic framework established in the Maastricht and Amsterdam Treaties on European Union (TEU), especially the unparalleled status of independence and peculiar mandate of the European Central Bank (ECB), were promised to virtually guarantee price stability and a "strong" euro. Actual developments have shattered these hopes in a rather drastic way. Despite the dismal monetary developments, conventional wisdom holds that neither the Maastricht regime nor the ECB might possibly be at fault. Yet, the euro's performance over 2000-01 is generally seen as a puzzle. This paper assesses the ECB's role in relation to the euro's (mal-) performance, explores the institutional setting and traditions behind the ECB's conduct, and scrutinizes the rationale that inspired its interest rate policies.

Suggested Citation

Bibow, Jörg, The Monetary Policies of the European Central Bank and the Euro's (Mal)Performance: A Stability-Oriented Assessment (September 2001). Jerome Levy Institute at Bard College Working Paper No. 338, Available at SSRN: https://ssrn.com/abstract=285818 or http://dx.doi.org/10.2139/ssrn.285818

Jörg Bibow (Contact Author)

Skidmore College - Department of Economics ( email )

Saratoga Springs, NY 12866
United States

Bard College - Levy Economics Institute ( email )

Blithewood Rd
Annandale on Hudson, NY 12504
United States