Unconventional Policy Instruments and Transmission Channels: A State-Contingent Toolbox for the ECB
We present a general framework apt to explain why central banks care about the co-existence of different transmission channels of monetary policy, and hence they endow themselves with different policy instruments. Within this framework, we then review and examine the key instruments adopted by the ECB to tackle the post-pandemic challenges, with a view to their consistency and efficacy. Finally, we make a few considerations about the future perspectives of monetary policy. This paper was provided by the Policy Department for Economic, Scientific and Quality of Life Policies at the request of the committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 18 March 2021.
In-Depth Analysis
External author
Luigi BONATTI, Andrea FRACASSO, Roberto TAMBORINI
About this document
Publication type
Keyword
- coronavirus disease
- economic analysis
- economic conditions
- economic consequence
- economic recovery
- ECONOMICS
- epidemic
- EU institutions and European civil service
- euro area
- European Central Bank
- EUROPEAN UNION
- Eurosystem
- FINANCE
- financial institutions and credit
- health
- impact study
- interest
- monetary economics
- monetary policy
- monetary relations
- money market
- single monetary policy
- SOCIAL QUESTIONS