Draghi, Mario

Draghi’s vision of economic policy is partially, but significantly, influenced by Keynes’s theory, although he explicitly affirmed that monetary policy “can become an effective, stabilising factor and contribute to collective prosperity in an independent and active way”. Some post-Keynesian economists have expressed a clear appreciation of Draghi’s ability to conduct monetary policy during the euro-area crisis (Barbera and Holtman, 2012, p.14). But the most recent actions of the ECB do not appear to be in line with post-Keynesian suggestions: although Draghi probably understands that (i) the euro-area crisis is a twin banking and intra-area balance-of-payments crisis, and (ii) policymakers would have to bring Southern Europe’s borrowing costs down and sustain debtor countries’ exports, he decided to endorse a so-called “Macroeconomic imbalance procedure” designed to asymmetrically punish deficit countries, preserving the greatest Northern European creditors only if monetary policy decisions are built into a systematic and predictable strategy, based on price stability, which drives expectations and guides the economy but doesn’t shock it