Rooms for extension of the ECB’s quantitative easing programme

Christophe Blot (1) , Jérôme Creel (1) , Paul Hubert (1)

1 OFCE - Observatoire français des conjonctures économiques (Sciences Po)

The announcement of an extension of quantitative easing (QE) until March 2017, at least, has cast doubts on the strength of the Euro area recovery and it has raised concerns about the credibility of the ECB. In this contribution, we argue that the current design of QE prevents unlimited monetary accommodation and, meanwhile, it may reduce the effectiveness of QE. Extending QE again through a modification in its design is thus possible. It will be effective provided governments and the ECB are able to cooperate.

Domaines: Economies et finances

Christophe Blot, Jérôme Creel, Paul Hubert. Rooms for extension of the ECB’s quantitative easing programme. [Research Report] Parlement européen. 2016. ⟨hal-03459414⟩