Buying into new ideas: the ECB’s evolving justification of unlimited liquidity
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| Title: | Buying into new ideas: the ECB’s evolving justification of unlimited liquidity |
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| Authors: | Casimir Hesse, Lea Steininger |
| Source: | Socio-Economic Review. 22:1255-1282 |
| Publisher Information: | Oxford University Press (OUP), 2024. |
| Publication Year: | 2024 |
| Subject Terms: | 9. Industry and infrastructure, 8. Economic growth, 1. No poverty, Department of Economics Working Paper Series |
| Description: | In 2012, Draghi put an end to rising euro area sovereign bond yield spreads by resolving to do ‘whatever it takes’. The crisis rhetoric and institutional practices of unlimited liquidity have since become commonplace, as countermeasures to recent market turmoil show. This article sets out to explain how and why ‘unlimited liquidity’ ideas moved to the ECB’s center of economic analysis during the euro crisis. Previous work fails to decipher that the ideational shift was highly anomalous when viewed against German ordoliberalism or scholarly support for ‘expansionary austerity’. Addressing this relative neglect in other accounts, we draw on qualitative text analysis and expert interviews to argue that this shift was due to norm entrepreneurs who capitalized on the uncertainty of the crisis. We employ constructivist arguments to identify four scoping conditions that account for the ascendance of ‘unlimited liquidity’: an indicative reference, credibility, institutional positioning and—as an extension to the literature—intellectual sensitivity. Our analysis suggests that the euro crisis changed economic ideas, and fundamentally remodels the constructivist framework for studying monetary policy in crisis times. |
| Document Type: | Article Research |
| Language: | English |
| ISSN: | 1475-147X 1475-1461 |
| DOI: | 10.1093/ser/mwae005 |
| DOI: | 10.57938/9461b3ea-3b9b-45e2-b910-c29488321c93 |
| Access URL: | https://research.wu.ac.at/de/publications/9461b3ea-3b9b-45e2-b910-c29488321c93 https://doi.org/10.57938/9461b3ea-3b9b-45e2-b910-c29488321c93 |
| Rights: | CC BY unspecified |
| Accession Number: | edsair.doi.dedup.....8c610a868c97a8c0679631f553d6f5e5 |
| Database: | OpenAIRE |
Nájsť tento článok vo Web of Science | Abstract: | In 2012, Draghi put an end to rising euro area sovereign bond yield spreads by resolving to do ‘whatever it takes’. The crisis rhetoric and institutional practices of unlimited liquidity have since become commonplace, as countermeasures to recent market turmoil show. This article sets out to explain how and why ‘unlimited liquidity’ ideas moved to the ECB’s center of economic analysis during the euro crisis. Previous work fails to decipher that the ideational shift was highly anomalous when viewed against German ordoliberalism or scholarly support for ‘expansionary austerity’. Addressing this relative neglect in other accounts, we draw on qualitative text analysis and expert interviews to argue that this shift was due to norm entrepreneurs who capitalized on the uncertainty of the crisis. We employ constructivist arguments to identify four scoping conditions that account for the ascendance of ‘unlimited liquidity’: an indicative reference, credibility, institutional positioning and—as an extension to the literature—intellectual sensitivity. Our analysis suggests that the euro crisis changed economic ideas, and fundamentally remodels the constructivist framework for studying monetary policy in crisis times. |
|---|---|
| ISSN: | 1475147X 14751461 |
| DOI: | 10.1093/ser/mwae005 |