The Independent European Central Bank: Keynesian Alternatives

Levy Economics Institute Working Paper No. 274

16 Pages Posted: 7 Sep 1999

See all articles by Philip Arestis

Philip Arestis

University of Cambridge - Department of Land Economy; Universidad del País Vasco (UPV/EHU)

Date Written: July 1999

Abstract

In this paper, the author aims to question the assumptions underlying the economic case for the independent European Central Bank (ECB) and argues that although a European Clearing Agency (ECA) of the type Keynes envisaged for the international economy is not a panacea for the economic problems of the European Union (EU); it is, nonetheless, a better way forward and far superior to the ECB. The paper (1) outlines the theoretical basis of Keynesian monetary and financial theory; (2) aims to ascertain the extent to which credit availability is affected by the creation of an ECB and, on that basis, to offer a critical analysis of current proposals for an ECB; (3) looks closely at the case for the ECA, seen as performing a range of functions rather than having a remit defined simply in terms of strict monetary control, including a commitment to providing the necessary finance for full employment and a responsibility for ensuring that the burden of balance-of-payments adjustment falls upon both deficit and surplus countries.

JEL Classification: E52, E58

Suggested Citation

Arestis, Philip, The Independent European Central Bank: Keynesian Alternatives (July 1999). Levy Economics Institute Working Paper No. 274. Available at SSRN: https://ssrn.com/abstract=174852 or http://dx.doi.org/10.2139/ssrn.174852

Philip Arestis (Contact Author)

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

Universidad del País Vasco (UPV/EHU)

Barrio Sarriena s/n
Leioa, Bizkaia 48940
Spain

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
225
Abstract Views
1,174
rank
141,115
PlumX Metrics