Side effects of Qe. Draghi: so are favored families … – Il Sole 24 Ore

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This article was published May 14, 2015 at 19:54.
The last change is the 14 May 2015 at 20:52.

The Qe is for young people, word of Mario Draghi. The effects of deflation penalize them exceedingly being net debtors (if they have a mortgage on your home, for example), but for the opposite reason families and more mature individuals, who own more wealth, erode vedendosela would benefit less from a zero inflation. ECB President, during a speech at the International Monetary Fund in Washington, in honor of the former director Michel Camdessus, expressed his satisfaction with the monetary policy measures taken under his leadership, although he acknowledged that a prolonged period of accommodative monetary policy would not exclude “side effects.” Effects that still can be “understood and minimized.”

So, from European-Quantitative easing an advantage for young people with the downside, the risk that consumption somehow fatichino to go. Why in particular, stressed Draghi, in a society that tends to aging, the low interest rates, which hamper the returns, they may push to accumulate savings just those approaching retirement age, disappointed by the lack of appreciation of assets social security. The “older” so as not to end up spending what strategists in Frankfurt augurererebbero. The exact opposite of what you would like to boost the eurozone economy. And not only. “The rise in asset prices as a result of our purchases” may “benefit the wealthy disproportionately and thus increase inequality.”

Issues feel even more “in the context of monetary union” heterogeneous as the eurozone. Although combat deflation by lowering interest rates, for example, move increasingly criticized by a number of the German central bank, Jens Weidmann, has, on the other hand, “inevitably a distributive effect because it reduces the net interest income of savers and lowers the ‘ debt burden of borrowers, “stressed the president of the ECB. In this way it promotes the aggregate demand, “encouraging businesses and families to move towards spending decisions by discouraging excessive savings and thus encourage investment while lowering the cost of finance.”

Side effects apart , the monetary policy of the European Central Bank is proving more effective than many observers had expected and has not yet had the feared impact on financial stability, said Draghi yet. “If a long period of low interest rates inevitably leads to a misallocation of resources, this does not necessarily lead to threaten the financial stability”, said Draghi, noting that so far there is little evidence of “widespread financial imbalances.”

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