New working paper on price and financial stability

In his working paper Helmut Siekmann analyzes the relationship between power, jurisprudence and economic law, bridging the gap between the Austrian School of Economics represented by Carl Menger, Eugen von Böhm-Bawerk and Ernst-Joachim Mestmäcker from the legal side and, on the other hand, the legal competences of the European Central Bank (ECB). Siekmann explores the question of where the independence of the ECB ends and which legal limits the ECB has to respect while maintaining price and financial stability. Finally, Siekmann points out risks that result from the ECB’s expansionary monetary policy.

According to Siekmann, from a legal perspective, the role of monetary policy does not involve obliging states to implement structural reforms and to pursue a sound fiscal policy. Also in view of the principle of democracy there have to be limits for autonomy, he argues. Otherwise it has to be justified by special reasons, which holds true for price stability but not for financial stability, Siekmann concludes.

IMFS Working Paper 104 (in German)
Helmut Siekmann
"Preis- und Finanzstabilität: der Primat der Politik, der rechtliche Rahmen und das "ökonomische Gesetz"

(PDF, 245 KB)