Interview , News of 23 September 2016

"ECB announcements lift inflation expectations by overall 20–30 basis points": seven questions to Malte Rieth

MichaelM/pixabay (Copyright)  EZB Zentralbank Bank
Copyright: MichaelM/pixabay

Dr. Rieth, the European Central Bank (ECB) has initiated various bond purchase programs. What exactly is it hoping to achieve?

First of all, the ECB wants to stabilize inflation and inflation expectations by purchasing bonds and assets, thus lowering interest rates— especially in the long run. Long-term interest rates are important for lending to households and businesses alike. The hope is that keeping interest rates low will lead to higher credit demand and activity. This should stimulate the economy and slowly raise inflation in the medium- to long-term. [...]

The interview with Malte Rieth is published in DIW Economic Bulletin 38/2016 | PDF, 113.76 KB

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