Working Paper: NBER ID: w24613
Authors: Hanswerner Sinn
Abstract: While the ECB helped mitigate the euro crisis in the aftermath of Lehman, it has stretched its monetary mandate and moved into fiscal territory. This text describes and summarizes the crucial role played by the ECB in the intervention spiral resulting from its bid to manage the crisis. It also outlines ongoing competitiveness problems in southern Europe, discusses the so-called austerity policy of the Troika, comments on QE and presents two alternative paths for the future development of Europe.
Keywords: No keywords provided
JEL Codes: E50; E58; G01; H63; H81
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| ECB interventions (E52) | economic conditions in southern European countries (E66) |
| low interest rates and quantitative easing (QE) (E43) | increased borrowing by governments (H74) |
| increased borrowing by governments (H74) | higher debt-to-GDP ratios (H69) |
| ECB's policies (E52) | redistributive effects among Eurozone countries (H23) |
| lower interest rates (E43) | benefits to heavily indebted southern European countries (F34) |
| ECB's quantitative easing program (E58) | increased government expenditure (H59) |
| ECB's interventions (E52) | mitigation of austerity measures imposed by the Troika (E69) |