The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

European Central Bank

  • Michael Binder
  • Volker Wieland
Reference work entry


The establishment of the European Central Bank (ECB) and with it the launch of the euro has arguably been a unique endeavour in economic history, representing an experiment of hitherto unknown magnitude in central banking. This article aims to describe the main aspects of the set-up and the responsibilities, strategy and operations of the ECB. It also aims to summarize some of the main lessons learned from the establishment of the ECB for monetary economics, and to sketch some of the prospects for the ECB and the euro.


Budget deficits Business cycles Economic and Monetary Union (EMU) Euro European Central Bank (ECB) European System of Central Banks (ESCB) Euro area Exchange Rate Mechanism (ERM) Globalization Harmonized Index of Consumer Prices (HIPC) Inflationary expectations Maastricht criteria Monetary transmission mechanism Open market operations Price stability Reserve requirements Standing facilities 

JEL Classifications

E58 E5 F3 G1 
This is a preview of subscription content, log in to check access.


  1. European Central Bank. 2004. The monetary policy of the ECB. ECB: Frankfurt am Main.Google Scholar
  2. European Central Bank. 2006. ECB statistical data warehouse. Online. Available at Accessed 14 Mar 2007.
  3. Issing, O. 2003. Background studies for the ECB’s evaluation of its monetary policy strategy. ECB: Frankfurt am Main.Google Scholar
  4. Issing, O., V. Gaspar, I. Angeloni, and O. Tristani. 2001. Monetary policy in the euro area. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  5. Padoa-Schioppa, T. 2004. The euro and its central bank: Getting united after the union. Cambridge: MIT Press.Google Scholar
  6. Posen, A.S. 2005. The euro at five: Ready for a global role? Washington: Institute for International Economics.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Michael Binder
    • 1
  • Volker Wieland
    • 1
  1. 1.