This paper explains the European debt crisis not as a result of insufficient fiscal discipline but as the result of a constructional flaw of the EMU. The reason for this flaw are the diverging real interest rates in EMU countries, which trigger self-reinforcing debt-spirals in the presence of...

We show that the ECB's interest rate changes during 1999-2010 have been mainly driven by changes in economic activity in the Euro area. Changes in actual or expected future HICP inflation play a minor, if any, role

Using two estimated models for the euro area and the United States, this paper investigates whether the observed difference in the amplitude of the interest rate cycle since 1999 in both areas is due to differences in the estimated monetary policy reaction function, differences in the structure...

On May 2 the ECB has decreased the interest rate on the main refinancing operations of the Eurosystem by 25 basis points, to 0.50%, starting from the operation to be settled on 8 May 2013. The interest rate on the marginal lending facility will also be decreased by 50 basis points, to 1.00%....

We contribute to the new, albeit fast-growing empirical literature on the determinants of trust in central banks. Like in most other studies we use panel data models based on the Eurobarometer survey on trust in the European Central Bank. Firstly, we confirm the main conclusion from previous...

As the lack of sufficient information for the calculation of the price index is generally known, the ECB no longer sets the objective of achieving the statistical annual rate of zero per cent of price increase but aims for an annual increase of slightly less than two per cent. The task of the...