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Central banks: From overburdening to decline?

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  • Issing, Otmar

Abstract

"Institutional Overburdening" to a large extent was a consequence of the "Great Moderation". This term indicates that it was a period in which inflation had come down from rather high levels. Growth and employment were at least satisfying and variability of output had substantially declined. It was almost unavoidable that as a consequence expectations on future actions of central banks and their ability to control the economy reached an unprecedented peak which was hardly sustainable. Institutional overburdening has two dimensions. One is coming from exaggerated expectations on what central banks can achieve ("expectational overburdening"). The other dimension is "operational overburdening" i.e. overloading the central bank with more and more responsibilities and competences.

Suggested Citation

  • Issing, Otmar, 2016. "Central banks: From overburdening to decline?," SAFE White Paper Series 42, Leibniz Institute for Financial Research SAFE.
    • Handle: RePEc:zbw:safewh:42
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    References listed on IDEAS

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    11. Mr. Otmar Issing, 2011. "Lessons for Monetary Policy: What Should the Consensus Be?," IMF Working Papers 2011/097, International Monetary Fund.
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    1. repec:ces:ifodic:v:15:y:2017:i:1:p:19309462 is not listed on IDEAS
    2. Gerald Braunberger, 2016. "Joseph A. Schumpeter: Ein Pionier der Makrofinanz," Schumpeter Discussion Papers SDP16007, Universitätsbibliothek Wuppertal, University Library.
    3. Charles Wyplosz, 2017. "How Far Should Unconventional Central Banking Go?," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(1), pages 28-30, 04.
    4. Stefano Figuera & Guglielmo Forges Davanzati & Andrea Pacella, 2022. "Considerations on the Legacy of Ordoliberalism in European Monetary Policy," HISTORY OF ECONOMIC THOUGHT AND POLICY, FrancoAngeli Editore, vol. 2022(2), pages 95-122.
    5. Itai Agur & Carola Binder & Cristina Bodea & Claudio Borio & Italo Colantone & Ana Carolina Garriga & Federico Favaretto & Stefan Gerlach & Ernest Gnan & Ryszard Kokoszczynski & Masaaki Higashijima & , 2020. "Populism, Economic Policies and Central Banking," SUERF Studies, SUERF - The European Money and Finance Forum, number 2020/1 edited by Ernest Gnan and Donato Masciandaro, May.
    6. Charles Wyplosz, 2017. "How Far Should Unconventional Central Banking Go?," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(01), pages 28-30, April.
    7. Timothy C. Irwin, 2020. "Accrual Accounting and the Government's Intertemporal Budget Constraint," Public Budgeting & Finance, Wiley Blackwell, vol. 40(4), pages 128-141, December.

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    Keywords

    Central Banking; ECB; Monetary Policy;
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