Working Papers



July 2013, No. 13-07R

A Monetarist Critique of ECB Monetary Policy in the Great Recession (Revised November 2014)

Robert L. Hetzel

Since 2008, the Eurozone has undergone two recessions, which together constitute the Great Recession. The explanation offered here attributes them to contractionary monetary policy. Interpreted in a way consistent with monetarist principles, the New Keynesian model provides the framework for identifying the precipitating shocks as monetary.


*This paper was previously published under the title "Contractionary Monetary Policy Caused the Great Recession in the Eurozone: A New Keynesian Perspective."

Contact Us


Lisa Kenney
(804) 697-8179