Financial and economic policy with continued monetary expansion (in German)

The report addresses potential effects on the German economy by the extremely expansionary monetary policy of the Eurosystem with large liquidity flows into Germany. The authors discuss various monetary transmission channels from a theoretical perspective. They analyze the impact of the Eurosystem’s monetary policy on Germany and discuss how to identify unsustainable developments at an early stage. The central aim of the report is to outline potential economic policy interventions that could contain the risks for the Germany economy and may help preventing severe misalignments. The measures that are most promising in safeguarding stability are grouped into measures related to fiscal policy and macroprudential policies.