Objectives of the European Central Bank

Question A:

The ECB should aim to achieve an inflation rate that averages 2% over time.

Responses weighted by each expert's confidence

Question B:

The ECB should take account of the environmental implications of its policy decisions.

Responses weighted by each expert's confidence

Question C:

The objectives set for the ECB by Treaty should make maximum sustainable employment of equal importance as price stability.

Responses weighted by each expert's confidence

Question A Participant Responses

Participant University Vote Confidence Bio/Vote History
Allen
Franklin Allen
Imperial College London
Disagree
4
Bio/Vote History
In today's world 2% doesn't seem as attractive as it did in 2005. Times have changed - 1% or 0% may be better. 2% may not be achievable.
Antras
Pol Antras
Harvard
Uncertain
5
Bio/Vote History
Blanchard
Olivier Blanchard
Peterson Institute
Uncertain
8
Bio/Vote History
it all comes to the definition of ``average''. If fuzzy, may be counterproductive
Bloom
Nicholas Bloom
Stanford
Uncertain
10
Bio/Vote History
I know of no theory or empirics showing a single objective Central Bank, with that objective being 2%, is optimal. Probably, but not certain
Blundell
Richard William Blundell
University College London Did Not Answer Bio/Vote History
Carletti
Elena Carletti
Bocconi
Uncertain
7
Bio/Vote History
Danthine
Jean-Pierre Danthine
Paris School of Economics
Disagree
9
Bio/Vote History
De Grauwe
Paul De Grauwe
LSE
Agree
7
Bio/Vote History
Eeckhout
Jan Eeckhout
UPF Barcelona
Disagree
6
Bio/Vote History
Fehr
Ernst Fehr
Universität Zurich
Agree
8
Bio/Vote History
Freixas
Xavier Freixas
Barcelona GSE
Disagree
3
Bio/Vote History
More flexibility is required to take into account contingencies
Fuchs-Schündeln
Nicola Fuchs-Schündeln
Goethe-Universität Frankfurt
Agree
4
Bio/Vote History
Galí
Jordi Galí
Barcelona GSE
Uncertain
8
Bio/Vote History
If estimates of r* remain low it should consider adjusting the target upward sometime down the road. See Andrade et al. at Brookings
-see background information here
Giavazzi
Francesco Giavazzi
Bocconi
Agree
8
Bio/Vote History
Griffith
Rachel Griffith
University of Manchester
No Opinion
Bio/Vote History
Guerrieri
Veronica Guerrieri
Chicago Booth
Agree
9
Bio/Vote History
Guiso
Luigi Guiso
Einaudi Institute for Economics and Finance
Agree
8
Bio/Vote History
Honohan
Patrick Honohan
Trinity College Dublin
Strongly Agree
10
Bio/Vote History
Should allow catchup of past undershoot. One day a move to 3 per cent may be imaginable, allowing more leeway for countercyclical expansion
Javorcik
Beata Javorcik
University of Oxford Did Not Answer Bio/Vote History
Krahnen
Jan Pieter Krahnen
Goethe University Frankfurt
Disagree
6
Bio/Vote History
Since in monetary policy credibility is king, the ECB should not change but rather hold on to its inherited objective.
Kőszegi
Botond Kőszegi
Central European University Did Not Answer Bio/Vote History
La Ferrara
Eliana La Ferrara
Harvard Kennedy Did Not Answer Bio/Vote History
Leuz
Christian Leuz
Chicago Booth
Agree
2
Bio/Vote History
Not my area but evidence exists suggesting inflation targeting in flexible way works well (though not clear how big a change this would be)
-see background information here
-see background information here
-see background information here
Mayer
Thierry Mayer
Sciences-Po
Uncertain
7
Bio/Vote History
Meghir
Costas Meghir
Yale
Agree
8
Bio/Vote History
Neary
Peter Neary
Oxford Did Not Answer Bio/Vote History
Pagano
Marco Pagano
Università di Napoli Federico II
Uncertain
5
Bio/Vote History
Why 2% rather than 1% or 3%? Where is the scientific background for this particular number? I suspect NONE.
Pastor
Lubos Pastor
Chicago Booth Did Not Answer Bio/Vote History
Persson
Torsten Persson
Stockholm University
Strongly Agree
7
Bio/Vote History
Pissarides
Christopher Pissarides
London School of Economics and Political Science
Strongly Agree
10
Bio/Vote History
more flexibility is needed here to deal with unpredictable events, like the covid recession or the debt crisis of 2012.
Portes
Richard Portes
London Business School
Strongly Disagree
9
Bio/Vote History
Should be higher! But they will continue to struggle to reach 2.
Prendergast
Canice Prendergast
Chicago Booth
Agree
6
Bio/Vote History
Rasul
Imran Rasul
University College London
Agree
6
Bio/Vote History
Reichlin
Lucrezia Reichlin
London Business School
Disagree
9
Bio/Vote History
I think that the ECB should aim at flexible inflation targeting understood as a medium term quantifiable objective.
Repullo
Rafael Repullo
CEMFI
Agree
8
Bio/Vote History
I would replace the close but below 2% for a 2% objective over the medium run.
Rey
Hélène Rey
London Business School
Disagree
9
Bio/Vote History
If it adopted this rule, it could have to tighten abruptly after overshooting the target which could be destabilising for the euro area.
Schoar
Antoinette Schoar
MIT
Agree
7
Bio/Vote History
Sturm
Daniel Sturm
London School of Economics
Agree
3
Bio/Vote History
Van Reenen
John Van Reenen
LSE
Agree
8
Bio/Vote History
Need for symmetry as low inflation as bad as high. There is good argument for targeting higher rate like 3% or 4% to avoid zero lower bound
Vickers
John Vickers
Oxford
Agree
9
Bio/Vote History
Symmetry around 2% would be much better than "below but close to"
Voth
Hans-Joachim Voth
University of Zurich
Uncertain
5
Bio/Vote History
Whelan
Karl Whelan
University College Dublin
Agree
9
Bio/Vote History
I certainly agree with the averaging approach. You could argue for a higher value than 2% given history of zero bound issues since 2000.
Wyplosz
Charles Wyplosz
The Graduate Institute Geneva
Agree
9
Bio/Vote History
That would be useful step. I would not mind a higher average target, eg 3%.
Zilibotti
Fabrizio Zilibotti
Yale University Did Not Answer Bio/Vote History

Question B Participant Responses

Participant University Vote Confidence Bio/Vote History
Allen
Franklin Allen
Imperial College London
Agree
6
Bio/Vote History
It's not clear to me how much impact central bank decisions have on environmental questions but to the extent it does they should do.
Antras
Pol Antras
Harvard
Disagree
7
Bio/Vote History
Seems like there should be other entities that can more directly take charge of environmental regulation.
Blanchard
Olivier Blanchard
Peterson Institute
Uncertain
8
Bio/Vote History
``take into account'' is again ambiguous. It should know about it but its standard mandate has priority.
Bloom
Nicholas Bloom
Stanford
Disagree
10
Bio/Vote History
Monetary policy should focus on macro issues - inflation, unemployment etc - not social and environmental issues.
Blundell
Richard William Blundell
University College London Did Not Answer Bio/Vote History
Carletti
Elena Carletti
Bocconi
Agree
7
Bio/Vote History
Danthine
Jean-Pierre Danthine
Paris School of Economics
Agree
9
Bio/Vote History
De Grauwe
Paul De Grauwe
LSE
Agree
6
Bio/Vote History
Eeckhout
Jan Eeckhout
UPF Barcelona
Agree
6
Bio/Vote History
Fehr
Ernst Fehr
Universität Zurich
Disagree
8
Bio/Vote History
Freixas
Xavier Freixas
Barcelona GSE
Agree
5
Bio/Vote History
Fuchs-Schündeln
Nicola Fuchs-Schündeln
Goethe-Universität Frankfurt
Agree
7
Bio/Vote History
Galí
Jordi Galí
Barcelona GSE
Agree
8
Bio/Vote History
But will likely conclude that those implications are small. The ECB cannot be a substitute for fiscal and regulatory policies in that area.
Giavazzi
Francesco Giavazzi
Bocconi
Uncertain
5
Bio/Vote History
Griffith
Rachel Griffith
University of Manchester
No Opinion
Bio/Vote History
Guerrieri
Veronica Guerrieri
Chicago Booth
Agree
7
Bio/Vote History
Guiso
Luigi Guiso
Einaudi Institute for Economics and Finance
Disagree
7
Bio/Vote History
Honohan
Patrick Honohan
Trinity College Dublin
Strongly Agree
10
Bio/Vote History
The corporate bond programme is behind the curve in this respect.
Javorcik
Beata Javorcik
University of Oxford Did Not Answer Bio/Vote History
Krahnen
Jan Pieter Krahnen
Goethe University Frankfurt
Strongly Disagree
7
Bio/Vote History
Recall Tinbergen: one policy instrument per objective. Keep monetary policy for inflation targeting, use Ordnungspolitik otherwise.
Kőszegi
Botond Kőszegi
Central European University Did Not Answer Bio/Vote History
La Ferrara
Eliana La Ferrara
Harvard Kennedy Did Not Answer Bio/Vote History
Leuz
Christian Leuz
Chicago Booth
Uncertain
2
Bio/Vote History
Clear that via effect on econ activity ECB policy has env implications but not obvious if mon policy is best way to address externalities
Mayer
Thierry Mayer
Sciences-Po
Disagree
5
Bio/Vote History
Meghir
Costas Meghir
Yale
Strongly Agree
9
Bio/Vote History
Neary
Peter Neary
Oxford Did Not Answer Bio/Vote History
Pagano
Marco Pagano
Università di Napoli Federico II
Agree
5
Bio/Vote History
I guess that the ECB could/should take environmental concerns into account in its bank prudential policy, not its monetary policy.
Pastor
Lubos Pastor
Chicago Booth Did Not Answer Bio/Vote History
Persson
Torsten Persson
Stockholm University
Uncertain
5
Bio/Vote History
Pissarides
Christopher Pissarides
London School of Economics and Political Science
Strongly Agree
10
Bio/Vote History
A no brainer. Need to save the planet, everyone should take into account the environmental implications of their decisions even the mighty
Portes
Richard Portes
London Business School
Disagree
8
Bio/Vote History
Prendergast
Canice Prendergast
Chicago Booth
Agree
8
Bio/Vote History
Rasul
Imran Rasul
University College London
Disagree
5
Bio/Vote History
Reichlin
Lucrezia Reichlin
London Business School
Agree
9
Bio/Vote History
Repullo
Rafael Repullo
CEMFI
Disagree
8
Bio/Vote History
As Jean Tirole recommended in his speech at the colloquium in honor of Benoit Coeure: “Use the proper instrument.”
Rey
Hélène Rey
London Business School
Agree
9
Bio/Vote History
For example the ECB should lead on TCFD disclosure
Schoar
Antoinette Schoar
MIT
Uncertain
9
Bio/Vote History
ECB does not have effective tools to achieve environmental goals. Policy makers, consumers and voters need to take responsibility for this.
Sturm
Daniel Sturm
London School of Economics
Agree
6
Bio/Vote History
Quantitative easing could avoid buying fossil fuel related bonds.
Van Reenen
John Van Reenen
LSE
Disagree
7
Bio/Vote History
Bad idea to load too many targets on one instrument
Vickers
John Vickers
Oxford
Disagree
7
Bio/Vote History
Environmental objectives call for policy tools other than monetary policy
Voth
Hans-Joachim Voth
University of Zurich
Disagree
9
Bio/Vote History
Whelan
Karl Whelan
University College Dublin
Strongly Agree
10
Bio/Vote History
While price stability is ECB's primary objective, it is required by Treaty to support the EU's broader goals, including evironmental policy.
Wyplosz
Charles Wyplosz
The Graduate Institute Geneva
Strongly Disagree
8
Bio/Vote History
As Tinbergen said, one instrument = one target. Bringing inflation up to the target would already be a big achievement.
Zilibotti
Fabrizio Zilibotti
Yale University Did Not Answer Bio/Vote History

Question C Participant Responses

Participant University Vote Confidence Bio/Vote History
Allen
Franklin Allen
Imperial College London
Uncertain
5
Bio/Vote History
It's a complex question with political as well as economic aspects. Having employment as an important secondary target may be better.
Antras
Pol Antras
Harvard
Uncertain
5
Bio/Vote History
Blanchard
Olivier Blanchard
Peterson Institute
Strongly Agree
9
Bio/Vote History
minimizing the output gap is more important than minimizing distance of inflation to target. Fortunately, they largely coincide.
Bloom
Nicholas Bloom
Stanford
Uncertain
10
Bio/Vote History
Blundell
Richard William Blundell
University College London Did Not Answer Bio/Vote History
Carletti
Elena Carletti
Bocconi
Uncertain
6
Bio/Vote History
Danthine
Jean-Pierre Danthine
Paris School of Economics
Disagree
9
Bio/Vote History
De Grauwe
Paul De Grauwe
LSE
Disagree
7
Bio/Vote History
Eeckhout
Jan Eeckhout
UPF Barcelona
Agree
6
Bio/Vote History
Fehr
Ernst Fehr
Universität Zurich
Uncertain
5
Bio/Vote History
Freixas
Xavier Freixas
Barcelona GSE
Strongly Agree
6
Bio/Vote History
Fuchs-Schündeln
Nicola Fuchs-Schündeln
Goethe-Universität Frankfurt
Agree
8
Bio/Vote History
Galí
Jordi Galí
Barcelona GSE
Agree
8
Bio/Vote History
Even though the current emphasis on the inflation objective as a "medium term" objective already allows for that.
Giavazzi
Francesco Giavazzi
Bocconi
Agree
8
Bio/Vote History
Griffith
Rachel Griffith
University of Manchester
No Opinion
Bio/Vote History
Guerrieri
Veronica Guerrieri
Chicago Booth
Strongly Agree
9
Bio/Vote History
Guiso
Luigi Guiso
Einaudi Institute for Economics and Finance
Uncertain
7
Bio/Vote History
Honohan
Patrick Honohan
Trinity College Dublin
Agree
10
Bio/Vote History
This is not as crucial as is often supposed, especially if inflation target becomes symmetrical.
Javorcik
Beata Javorcik
University of Oxford Did Not Answer Bio/Vote History
Krahnen
Jan Pieter Krahnen
Goethe University Frankfurt
Strongly Disagree
6
Bio/Vote History
Treaty is wise and respects Tinbergen rule. If you want more employment, use fiscal measures or, again, a better Ordnungspolitik.
Kőszegi
Botond Kőszegi
Central European University Did Not Answer Bio/Vote History
La Ferrara
Eliana La Ferrara
Harvard Kennedy Did Not Answer Bio/Vote History
Leuz
Christian Leuz
Chicago Booth
Disagree
2
Bio/Vote History
While I can see arguments for Fed or BoE, it would be much harder for ECB w/ so many euro ctrys, emply better addressed with fiscal policies
Mayer
Thierry Mayer
Sciences-Po
Agree
5
Bio/Vote History
Meghir
Costas Meghir
Yale
Agree
9
Bio/Vote History
Neary
Peter Neary
Oxford Did Not Answer Bio/Vote History
Pagano
Marco Pagano
Università di Napoli Federico II
Strongly Agree
7
Bio/Vote History
In this sense, its statutory mandate should be made more similar to that of the Fed. In practice it already pursued this objective too.
Pastor
Lubos Pastor
Chicago Booth Did Not Answer Bio/Vote History
Persson
Torsten Persson
Stockholm University
Uncertain
5
Bio/Vote History
Pissarides
Christopher Pissarides
London School of Economics and Political Science
Agree
10
Bio/Vote History
employment should be taken into account but maybe not as much weight on it as price stability
Portes
Richard Portes
London Business School
Strongly Agree
9
Bio/Vote History
Prendergast
Canice Prendergast
Chicago Booth
Uncertain
8
Bio/Vote History
Rasul
Imran Rasul
University College London
Agree
5
Bio/Vote History
Reichlin
Lucrezia Reichlin
London Business School
Disagree
9
Bio/Vote History
Flex IT and commitment to nominal GDP targeting path best way to minimise output vol in short run and achieve price stability in medium run
Repullo
Rafael Repullo
CEMFI
No Opinion
Bio/Vote History
An irrelevant hypothetical question: The Treaty is not going to be changed anytime soon.
Rey
Hélène Rey
London Business School
Disagree
9
Bio/Vote History
ECB has a legal obligation to support the [EU’s] general economic policies; objectives laid down in Article 3 of the Treaty.so more general
Schoar
Antoinette Schoar
MIT
Disagree
10
Bio/Vote History
central banks do not have tools to achieve long run employment goals.
Sturm
Daniel Sturm
London School of Economics
Uncertain
3
Bio/Vote History
Van Reenen
John Van Reenen
LSE
Disagree
6
Bio/Vote History
Vickers
John Vickers
Oxford
Disagree
9
Bio/Vote History
Monetary policy can best contribute to maximum sustainable employment by maintaining price stability, so that should be primary
Voth
Hans-Joachim Voth
University of Zurich
Disagree
7
Bio/Vote History
Whelan
Karl Whelan
University College Dublin
Uncertain
5
Bio/Vote History
Tricky one. I'm not sure ECB and the Fed really behave much differently despite different mandates. Treaty Change is impossible anyway.
Wyplosz
Charles Wyplosz
The Graduate Institute Geneva
Uncertain
9
Bio/Vote History
Yeah, sure, it sounds nice. But we don't know how to measure maximum sustainable unemployment. And unemployment is not just a macro variable
Zilibotti
Fabrizio Zilibotti
Yale University Did Not Answer Bio/Vote History