Most economists expected that the Great Recession produced by the financial meltdown of 2008 would usher in a resurgence of traditional Keynesian economics and a decline of what has come to be called “market fundamentalism”. By contrast, also due to the inadequate size of the 2009 stimulus...

The global financial and economic crisis has reopened the debate on the role, the efficacy and limits of fiscal policies in sustaining aggregate demand. At the same time, the crisis has worsened the prospects of unsustainability of public debt in some countries. In order to conciliate fiscal...

We evaluate the ECB’s monetary policy strategy against the underlying economic structure of the euro area economy, in normal times and in times of severe financial dislocations. We show that in the years preceding the financial crisis that started in 2007 the strategy was successful at...