Original scientific paper

https://doi.org/10.1080/1331677X.2016.1168039

Global liquidity and strategies of exit from unconventional monetary policies

Ansgar Belke orcid.org/0000-0002-9743-4758

Abstract

We develop some main characteristics of a roadmap of how the
European Central Bank (ECB) should further reduce the volume of its
balance sheets and roll back credit easing in order to prevent inflation. The exit should be step-by-step rather than a one-off. Communicating about the exit strategy must be an integral part of the 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 non-surmountable practical problems of coordinating exit with asymmetric country interests, however, the ECB should go ahead – perhaps jointly with some Far Eastern economies. Coordination of monetary and fiscal exit would potentially undermine ECB independence and is also technically out of reach within the euro area.

Keywords

Exit strategies; international policy coordination and transmission; open market operations; unorthodox monetary policy (UMP)

Hrčak ID:

171725

URI

https://hrcak.srce.hr/171725

Publication date:

22.12.2016.

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