Bibow, J., (2014), “On German Public Opinion And Illusional ECB Power”, Social Europe Journal, 24 February.
After taking a short breather in late January-early February, the markets now seem to be back in ‘happy mode’. Whether the news on the economic recovery is good or bad doesn’t really matter. The current convention is that growth acceleration is under way.
That emerging markets had become key drivers of global growth was yesterday’s story, today they don’t seem to matter anymore. Developed economies are back, so we are told. The U.S. is roaring ahead, the euro crisis is over. And, by the way, central banks have no intention to really stop the party any time soon – as inflation is so conveniently low. In fact, inflation is nonexistent since labor markets are not exactly red hot and wages essentially flat. So lucky for us, or at least some of us, that at least the markets want to go up no matter what.
Curiously, not even the long-awaited ruling by Germany’s constitutional court on the ECB’s “outright monetary transactions” (OMTs) or, rather, on Germany and the euro, could rock the boat. The court expressed doubts about the legality of the ECB’s supposedly all-powerful weapon meant to bolster the earlier ‘whatever it takes’ promise, the mere airing of which had ended the euro crisis and kick-started the brisk recovery now firmly under way. ‘So what?’, Mr. Market shrugged his shoulders.
Relevant Posts
- Wyplosz, Ch., (2014), “What you ought to know about the ECB and Unemployment”, Social Europe Journal, 18 February.
- Wren-Lewis, S., (2014), “How the ECB could be Radical by being Old Fashioned”, Social Europe Journal, 20 January.
- Wolf, G., (2013), “Governments must follow the ECB’s rate cut with policy action”, Bruegel, 13 November.