Abstract
Abstract This chapter takes an economic-constitutional approach to quantitative easing (QE) as the European Central Bank (ECB)’s policy instrument. The Public Sector Purchase Programme (PSPP)—that initially was a heavily contested measure in the specific euro area context—has become the most active part of monetary policy and expanded further with the Pandemic Emergency Purchase Programme (PEPP). The chapter analyses how the QE as non-standard or unconventional monetary policy is a continuation of, or differs from, the more traditional monetary policy of the ECB. One conclusion is that QE is turning into conventional monetary policy with time. Most of the constitutional issues related to the large-scale public sector bond purchases in the forms of the PSPP and PEPP programmes are addressed. The issues include the formal objectives of the programmes as presented by the ECB as well as other possible aims that could help explain the programmes, their size, features, and timing, but also the economic effects of the ECB’s measures. A critical question is whether the ECB has passed from being a ‘central bank of institutions’ to ‘a central bank of markets’ thus justifying it being considered as a ‘new ECB’.
Published Version
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