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"The crisis brought further evidence of a basic design flaw of monetary union, namely that we could not rely for its sound working on member countries to carry out appropriate economic policies," Mr. Issing wrote.
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What is holding back a healthy recovery is not lack of monetary stimulus, it argues; rather it is underlying flaws in the way that many economies operate whose effects are particularly pernicious after a financial crisis.
One of the zone's little-noticed potential design flaws is a Germanic insistence on Chinese Walls between bank supervision and the conduct of monetary policy, even though both will come under the E.C.B.'s aegis.
For example, an introductory economics course should not only discuss the macro-impacts of monetary and fiscal policy but also raise debate on the inherent flaws in our currently accepted calculation of GDP, which looks at only financial transactions (both good and bad), or on the consequences of increasing income inequality in society.
Journal of Monetary Economics.
It is another form of monetary activism.
The State Bank lost control of monetary growth.
What are your instruments of monetary control?
What kind of monetary policy is it?
There is now plenty of monetary stimulus.
The "entire future course of monetary policy"?
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com