Buying into new ideas
The ECB's evolving justification of unlimited liquidity
Bibliographic Data
| ID | 4237315 |
|---|---|
| Authors | Casimir Hesse, L Eden Steininger (0000-0001-9357-1176, Vienna Institute for International Economic Studies) |
| Year | 2024 |
| Volume | 22 |
| Issue | 3 |
| Pages | 1255-1282 |
| Publication date | 2024-07-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Socio-Economic Review (JOURNAL) |
| Journal identifiers | ISSN: 1475-1461 • E-ISSN: 1475-147X |
| DOI | 10.1093/ser/mwae005 |
| OpenAlex | W4392885537 |
| Language | EN |
| Citations received | 4 |
| References cited | 56 |
In 2012, Draghi put an end to rising euro area sovereign bond yield spreads by resolving to do 'whatever it takes'. The crisis rhetoric and institutional practices of unlimited liquidity have since become commonplace, as countermeasures to recent market turmoil show. This article sets out to explain how and why 'unlimited liquidity' ideas moved to the ECB's center of economic analysis during the euro crisis. Previous work fails to decipher that the ideational shift was highly anomalous when viewed against German ordoliberalism or scholarly support for 'expansionary austerity'. Addressing this relative neglect in other accounts, we draw on qualitative text analysis and expert interviews to argue that this shift was due to norm entrepreneurs who capitalized on the uncertainty of the crisis. We employ constructivist arguments to identify four scoping conditions that account for the ascendance of 'unlimited liquidity': an indicative reference, credibility, institutional positioning and-as an extension to the literature-intellectual sensitivity. Our analysis suggests that the euro crisis changed economic ideas, and fundamentally remodels the constructivist framework for studying monetary policy in crisis times
Economics · Keynesian economics · Liquidity risk · Liquidity trap · Market liquidity · Monetary economics · European Monetary and Fiscal Policies · Global Financial Crisis and Policies · Global Financial Regulation and Crises
The General Theory of Employment, Interest, and Money
Ruling Ideas
National Interests in International Society
Manias, Panics and Crashes
Making Money
The Economy of Esteem
A Model of Balance-of-Payments Crises
The Political Economy of Fiscal Adjustments
Collapsing exchange-rate regimes
The two concepts of money
Fiscal Expansions and Adjustments in OECD Countries
Austerity
The Limits of Transparency
Declarations of Dependence
Great Transformations
Masters of the ‘masters of the universe’? Monetary, fiscal and financial dominance in the Eurozone
The Institutional Roots of Incremental Ideational Change
Economic Ideas and the Political Construction of the Financial Crash of 2008
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Varieties of Economic Crisis, Varieties of Ideational Change
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Independent or lonely? Central banking in crisis
The political economy of shadow banking
Currency wars in the advanced world
The Euro Crisis’ Theory Effect
The Bocconi boys go to Brussels
Germany and the Eurozone Crisis
When Is It Rational to Learn the Wrong Lessons? Technocratic Authority, Social Learning, and Euro Fragility
Powerful rules governing the euro
As I Drifted on a River I Could Not Control
Understanding the Political Economy of the Eurozone Crisis
From Panic‐Driven Austerity to Symmetric Macroeconomic Policies in the E urozone
How Do Crises Lead to Change? Liberalizing Capital Controls in the Early Years of New Order Indonesia
A Panacea for all Times? The German Stability Culture as Strategic Political Resource
Ideas are Not as Stable as Political Scientists Want Them to Be
Banking on Bonds
Exogenous Shocks or Endogenous Constructions? The Meanings of Wars and Crises
International Norm Dynamics and Political Change
Anarchy is what states make of it
Pathology Without Crisis? The Strange Demise of the Anglo-Liberal Growth Model
Paradigms and Paradox
The Political Power of Economic Ideas
Public Debt Overhangs
Thematic networks
| Unique citing works | 4 |
|---|---|
| Citations per year | 4 |
| Citation span | 2025 - 2026 (2) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 4 |