Too little, too late? The political determinants of ECB’s bond buying programmes

Manuela Moschella (Centre for International Governance Innovation)
Manuela Moschella (Scuola Normal Superiore & Centre for International Governance Innovation)

Author feature: Manuela Moschella

Manuela Moschella, professor in International Political Economy at the Scuola Normale Superiore (Pisa), introduces her most recent work and one of her recent JEPP publications. She is our (first) featured JEPP author. Not only is her work intriguing, her research appears twice in JEPP’s current issue (Vol. 23, no. 6).

Since the start of the crisis central banks have significantly expanded the list of policy tools to stabilize domestic economies. Moving beyond interest rate policy, leading central banks have adopted forward guidance, quantitative easing, qualitative easing and, recently, a policy of negative interest rates. However, we still know little about the determinants of central banks’ policy choices. Why did central banks choose one particular policy instrument instead of another? I’m currently puzzling with this question in a book project I’m developing with Domenico Lombardi (Centre for International Governance Innovation). In the book, we compare the unconventional monetary responses to the crisis offered by the Fed, the Bank of England and the ECB. The article we just published in JEPP (The government bond buying programmes of the European Central Bank: an analysis of their policy settings) is part of our ruminations as it zooms into the ECB to identify the factors that shape the design of its monetary policies. In addition to the “usual suspects” – interests, institutions and ideas – our analysis shows that the ECB’s self-image as independent from governments’ authority loomed large in its decisions.