Central Banking, Monetary Policy, and the European Central Bank

Edited by Emanuele Citera, Assistant Professor of Economics, Division of Social Studies, Bard College, USA, Lino Sau, Associate Professor of Political Economy, Department of Economics and Statistics “Cognetti de Martiis”, University of Turin and Domenica Tropeano, Associate Professor of Political Economy, Department of Economics and Law, University of Macerata, Italy

• ContentsPreface xivPART I Theoretical issues1 Is the ECB well-equipped to deal with upcoming financialinstability and crises? 2Lino Sau, Emanuele Citera and Domenica Tropeano2 Inflation is not a monetary phenomenon: A critical analysis ofthe theoretical model that inspires the European Central Bank 20Giancarlo Bertocco and Andrea Kalajzić3 Liquidity and solvency of national government in theEurozone and the role of the ECB 57Klaus Diekmann, Dirk Ehnts and Leon HeckmannPART II Climate change and monetary policy4 Climate change, carbon prices, and the role of the ECB’smonetary policy 79Olimpia Fontana5 Economic policy and climate change: Current practices andchallenges for the ECB 100Ettore Gallo and João Paulo Braga6 After the crises and in front of climate change: Should theindependence and mandate of the ECB be reviewed? 121Etienne FarvaquePART III Banking and interbank market7 Transforming the European Central Bank into aninternational settlement institution: The Keynes Plan revisited 136Sergio Rossi8 The limits of mainstream monetary policy and a proposal forpublic banks 150Riccardo Zolea9 A rollover-based source of the European fragmentation 167Jessica Reale

‘The ECB has long been criticized for institutionalizing supply-side macroeconomics, a limited perspective on inflation drivers, and a ‘fair weather’ view of the relationship between monetary union and fiscal policy. It now faces new challenges in the form of the climate crisis and potential disruptions to the payments system. Central Banking, Monetary Policy, and the European Central Bank addresses these issues in a series of thoughtful and constructive essays that, together, offer hope for a brighter future for Europe at a critical moment in its history.’