Financial crisis, global liquidity and monetary exit strategies

Arbeitspapier

We develop a roadmap of how the ECB should further reduce the volume of money (money supply) and roll back credit easing in order to prevent inflation. The exits should be step-by-step rather than one-off. Communicating about the exit strategy must be an integral part of the exit strategy. Price stability should take precedence in all decisions. Due to vagabonding global liquidity, there is a strong case for globally coordinating monetary exit strategies. Given unsurmountable practical problems of coordinating exit with asymmetric country interests, however, the ECB should go ahead - perhaps joint with some Far Eastern economies. Coordination of monetary and fiscal exit would undermine ECB independence and is also technically out of reach within the euro area.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DIW Discussion Papers ; No. 995

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy ; Central Banks and Their Policies ; International Policy Coordination and Transmission ; Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
• Subject: Exit strategies ; international policy coordination and transmission ; open market operations ; unorthodox monetary policy ; Finanzmarktkrise ; Gesamtwirtschaftliche Liquidität ; Geldpolitik ; Internationale wirtschaftspolitische Koordination ; Geldmenge ; Inflationsbekämpfung ; EU-Staaten ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Belke, Ansgar
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/36746
• Last update: 10.03.2025, 11:42 AM CET