Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/277363 
Authors: 
Year of Publication: 
2016
Citation: 
[Journal:] European Journal of Economics and Economic Policies: Intervention (EJEEP) [ISSN:] 2052-7772 [Volume:] 13 [Issue:] 2 [Year:] 2016 [Pages:] 241-254
Publisher: 
Edward Elgar Publishing, Cheltenham
Abstract: 
This article poses the question of whether monetary financing of public investment constitutes a viable way forward for the euro area. The problems of low inflation, high unemployment and public debts seem scarcely resolvable in an environment that is constrained by the virtual exhaustion of monetary policy and legal limitations on expansionary fiscal policy. The author draws on the literature on monetary finance to identify key features of a scheme that could function in the context of EMU. He proposes to achieve an indirect monetary financing of public investment by the ECB committing to take newly issued EIB bonds on to its balance sheet. This would be essentially costless in a deflationary environment and could be expected to exhibit high multiplier effects. The independence of the ECB is maintained by making bond purchases subject to an inflation 'trigger'.
Subjects: 
monetary finance
monetary policy
public investment
euro area
ECB
EIB
JEL: 
E02
E12
E22
E24
E31
E58
E62
E63
H54
H63
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.