Thursday, March 10, 2016

ECB Panics as Austerity Continues to Fail

OK, maybe "panic" is too strong a word. But when the ECB cuts its main rate to 0 and invents yet another acronym for "pushing on a string," in this case TLTRO for "targeted longer-term refinancing operation," you know that central bankers, who intensely dislike rumpling their expensive suits, have been ruffled by the latest statistics. Draghi has tried and failed to light a fire under governments that have thus far steadfastly refused to jettison the austerity that threatens to send Europe into a deflationary spiral, but Charles Wyplosz isn't above issuing another reminder:

D’autres soulignent que les causes de l’inflation faible, telles que l’anémie de la demande, échappent en grande partie au champ d’action des banques centrales, qui en ont déjà fait beaucoup depuis la crise. « Elles sont aujourd’hui les seules institutions au chevet de l’économie mondiale, constate Charles Wyplosz, économiste à l’Institut des hautes études internationales de Genève. Il est regrettable que les gouvernements, eux, aient renoncé à faire leur part du travail. »

1 comment:

bernard said...

has liquidity trap 101 been taught at ENA since the late seventies and how old are current technocrats in effective charge of government policy?