Quantitative tightening in the euro area
Why has the ECB decided to implement this policy?
In March 2023, the European Central Bank (ECB) launched its quantitative tightening (QT) policy, to unwind its portfolio of assets that resulted from its quantitative easing (QE) policy of the last decade.
Despite the scarce evidence on the effects of QT, it was never attempted in the Euro area. Most lessons can only be drawn from the 2017-19 experience in the United States.
In this episode of The Sound of Economics, Maria Demertzis invites Grégory Claeys and Megan Greene to discuss why the ECB has decided to go down the route of quantitative tightening and what it could mean for the future of the euro area.
Relevant publication:
Finding the right balance (sheet): quantitative tightening in the euro area, report by Grégory Claeys, requested by the ECON Committee, European Parliament
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