Lectures on Monetary Theory and Policy

Giovanni Di Bartolomeo

An ECB's Monetary Policy History

• The Maastricht Vision (1999-2007)

• Quantitative easing after the Financial Crisis (2008-2010): simultaneous decentralized fiscal expansion and centralized monetary

• The Sovereign Debt Crises (2011-2014): expansionary monetary policy and restrictive fiscal policies

• The fight against Deflation (2015-2019) with excessive tasks on monetary policy

  • Focus: The ECB's Asset Purchase Programme: Theory, effects, and risks by Pierpaolo Benigno & Paolo Canofari & Giovanni Di Bartolomeo & Marcello Messori

• The Pandemic Emergency (2020-22) and the Next Generation EU (2022-27) with expansionary centralized fiscal policies hosted by the ECB

  • Focus: The ECB's policy measures during the COVID-19 crisis by Pierpaolo Benigno & Paolo Canofari & Giovanni Di Bartolomeo & Marcello Messori

• The Russian-Ukrainian war and the specter of Stagflation (2022-)

Main references

• A tale of two decades: the ECB’s monetary policy at 20, by Massimo Rostagno, Carlo Altavilla, Giacomo Carboni, Wolfgang Lemke, Roberto Motto, Arthur Saint Guilhem, & Jonathan Yiangou, ECB.

• Euro area policy mix: From horizontal to vertical coordination, by Marco Buti & Marcello Messori, CEPR Policy Insight No 113.

• The implementation and the rationale of the new inflation target of the ECB by Pierpaolo Benigno & Paolo Canofari & Giovanni Di Bartolomeo & Marcello Messori

A US Monetary History (timeline)

• Before the Fed (1791-1913)

  • Focus: The Panic of 1907

• Fed’s Formative Years (1913-1929)

  • Focus: Federal Reserve Act Signed into Law (December 23, 1913)

• Great Depression (1929-1941)

  • Focus: Stock Market Crash of 1929 (October 1929)

  • Focus: The Recession of 1937–38

• The Second World War and Its Aftermath (1941–1951)

• After the Accord (1951-1965)

  • Focus: The Treasury-Fed Accord (1951)

  • Focus: Lean-against-the-wind (1953)

  • Focus: Launch of the Bretton Woods System (1958)

• The Great Inflation (1965–1982)

  • Focus: Nixon Ends Convertibility of U.S. Dollars to Gold and Announces Price Controls (1971)

  • Focus: Oil Shock of 1973-74 and Oil Shock of 1978-79

  • Focus: Volcker's Announcement of Anti-Inflation Measures (1979)

• The Great Moderation (1982–2007)

• Subprime Mortgage Crisis (2007–2010)

• Great Recession and After (2007–...)

  • Focus: Secular Stagnation and Monetary Policy (2007-...)