Your feedback is important to us!
We invite all our readers to share with us their views and comments about this article.
Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.
Alert: If you are facing problems with posting comments, please note that you must verify your email with Disqus prior to posting a comment. follow this link to make sure your account meets the requirements. (http://bit.ly/vDisqus)
When the European Central Bank's Governing Council met on Dec. 14, there was little to surprise financial markets, because no policy changes could be gleaned from public remarks. The previous meeting, in late October, had already set the stage for the normalization of monetary policy, with the announcement that the ECB would halve its monthly asset purchases, from 60 billion euros ($71 billion) to 30 billion euros, beginning in January 2018 .The In this context, it is important to ensure that policy normalization in the eurozone does not become Germanization, which was the status quo the last time eurozone conditions were "normal," before the financial crisis.By contrast, for all the other eurozone members, there were large deviations between the ECB policy interest rate and the interest rates consistent with the Taylor rule. In the years before the crisis, interest rates were "too low" for eurozone countries, like Spain, that were booming. It is only after the 2010 episode that the ECB policy rate fell substantially and persistently below the interest rate consistent with a Taylor rule for Germany.
Exposing China’s overseas lending
When economic history improves with time
Italy’s long, hot summer as debt crisis looms
FOLLOW THIS ARTICLE