Abstract
The ECB during 2012 set a new mode of monetary and credit policy, amounting to new credit given at low interest rates of 1 % to be propagated into the system by selected commercial banks. We have shown that, despite its prospects, this policy is futile and will, in fact, result into a new recession. If we consider this as the first in a series of last attempts to save the essential unity of the Eurozone, the question begs itself: What will happen in the future?
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Notes
- 1.
This is a case where it should be well known that good money drives out bad money.
- 2.
See Bogus, 2010, p. 121.
- 3.
See Segoviano and Goodhart, 2009 for measurement of contagion.
- 4.
See Bogus, 2010, Chap. VII.
References
Hayek FA ([1935] 1967) Prices and production. 2nd edn. Augustus M. Kelley, New York
Segoviano M, Goodhart C (2009) Banking stability measures, IMF working paper 09/04. International Monetary Fund, Washington
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Tsionas, E.G. (2014). Can There be Stable Currencies After the Euro?. In: The Euro and International Financial Stability. Financial and Monetary Policy Studies, vol 37. Springer, Cham. https://doi.org/10.1007/978-3-319-01171-4_18
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DOI: https://doi.org/10.1007/978-3-319-01171-4_18
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