In the last two years the European Central Bank has navigated towards monetary normalization trying to find a balance between inflation control and recession risks. To understand the complex financial scenario that you have found yourself facing since April 27th is on newsstands with the Giornale di Brescia «The euro, rates and the ECB» (Il Sole 24 Ore; pp. 96) by Donato Masciandaro. The volume is purchasable at 9.90 euros (plus the daily newspaper).
The book
The ECB between Scylla and Charybdis: identify the route of monetary normalization between the risk of resilient inflation and that of a latent recession, also wondering what will happen to it «green turn» desired by President Lagarde.
To understand where the ECB is going, we need to look at one strategic choice made in 2022: moving from monetary announcements to ambiguity, with the two risks that derive from it. First: increase the real costs of a disinflationary policy and the probability of recession. Second: increase political pressure on the conduct of monetary policy, questioning the independent institutional structure of the ECB.
However, a strategy based too much on ambiguity risks worsening the tensions that can emerge between policy proponents in the ECB board more or less restrictive (hawks versus doves), but can also determine the emergence of opportunistic (peacocks) or disloyal (crows) behavior on the part of individual central bankers.
Who is Donato Masciandaro
Born in Matera in 1961. Since 2001 he has been Full Professor of Political Economy. Since 2005 he has been the owner of chair of Economics of Financial Regulation at Bocconi University in Milan, where he has been since 2018 Director of the Baffi Research Center. From 2024 it is President of Suerf (Société Universitaire Européenne de Recherches Financières). Since 1989 collaborates with Il Sole 24 Oresince 2017 with the weekly column Falchi e Colombe.
